April 16, 2018 / 6:05 PM / 10 days ago

U.S. fund Manikay to take Tel Aviv bourse stake, public to buy 30 percent

JERUSALEM (Reuters) - U.S.-based investment fund Manikay Partners will buy 19.9 percent of the Tel Aviv Stock Exchange in a deal valuing it at 551 million shekels ($156 million) while at least 30 percent of the exchange will be sold to the public, TASE said on Monday.

A man enters the Tel Aviv Stock Exchange, in Tel Aviv, Israel January 29, 2017. REUTERS/Baz Ratner

Another 21.8 percent will be acquired by a number of international investors, added Tel Aviv Stock Exchange (TASE), which has struggled declining trading volumes and in attempts to lure dozens of Israeli companies listed on foreign exchanges.

“We believe the entry of international investment groups ... combined with a significant share held by the public is the most appropriate structure for the local stock exchange and one that would support its continued development and growth,” said Ittai Ben-Zeev, the TASE’s chief executive.

The public’s shares will be entrusted to a trustee until their distribution, which is expected to take place in the fourth quarter of 2018 through a direct placement.

TASE demutualised last September and became a for-profit bourse and offered to buy out its shareholders.

In February, it said it had commitments from member banks to buy back 71.7 percent of their shares and that TASE had until April 18 to accept.

At the time, a source said more than 10 foreign stock exchanges had shown interest in buying a controlling stake in TASE, while Ben-Zeev had planned for an initial public offering sometime in 2019.

The Tel Aviv bourse aims to become competitive, cheaper and more efficient after around 200 de-listings over the past decade and a trading volume slump. In 2017 stock trading averaged 1.4 billion shekels, or about $400 million, a day, up slightly from 2016 on a rise in IPOs but well below 2 billion shekels in 2010.

Manikay, a U.S. hedge fund with operations in London and Sydney, has been involved in a number of exchange-related transactions, including with the New York Stock Exchange, Chicago Board of Trade and the Sydney Future Exchange.

($1 = 3.5284 shekels)

Reporting by Steven Scheer; Editing by Tova Cohen and Alexander Smith

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