Manikay Partners, International Investors to Buy Stake in The Tel Aviv Stock Exchange

The Tel Aviv Stock Exchange board of directors has approved the sale of a 71.7% stake in the exchange to foreign investors, the exchange announced Monday. New York-based hedge fund Manikay Partners LLC will acquire 19.9%, while an unnamed group of five international investors will acquire 51.8%.

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Of the stake acquired by the foreign investor group, 30% will be held by a trustee before being offered in direct placement to the public in the last quarter of 2018. After the placement, the group will hold a 21.8% stake in the exchange. 22.3% will remain in the hands of existing investors, and 6% will remain in the hands of the exchange's employees.

The sale will be conducted according to an exchange value of NIS 551 million ($156.3 million), according to the announcement. As this is higher than the sum the selling members can legally receive, the difference, NIS 43 million, will go into the exchange's coffers.  

In 2017, the Israeli parliament amended Israel’s securities law, enabling changes to the exchange’s ownership structure. Following the change, no single member can own a stake larger than a 5%, necessitating the sale of surplus shares within the next five years. In January, the exchange announced most of its shareholders agreed to sell their stake.

Some of the contenders in the bidding previously named by Calcalist, citing sources, were the London Stock Exchange, the Toronto Stock Exchange and the Singapore Exchange Ltd.  

Manikay, which is backed by Goldman Sachs, has around $2.5 billion in assets under management. It is invested in several leading exchanges, including London, Toronto, Frankfurt Stock Exchange, and Nasdaq Nordic.