Tzachi Abu's Firm Offers $150 Million for Stake in Tel Aviv Project, Facing Right of First Refusal

Ari Real Estate, controlled by Tzachi Abu, has submitted a non-binding offer of 562.5 million shekels (approximately $150 million) to acquire Delek Motors' 50% stake in two office towers within the La Guardia project in Tel Aviv. Delek Motors, which uses the buildings for its Ford, Mazda, and BMW showrooms, confirmed receiving the offer late Wednesday. The proposed valuation for the two towers stands at 1.13 billion shekels ($300 million), with Delek Motors intending to continue leasing the showrooms as part of the deal.

However, Vitania, a publicly traded company controlled by Rami Unger, holds a right of first refusal for the stake and has stated its intention to exercise it. Vitania announced it is examining the offer, including financing options and a potential rights issue. Sources indicate Vitania is indeed planning to exercise its right, diminishing Ari Real Estate's chances of acquiring the stake. Vitania has 60 days to respond to Delek Motors.

The La Guardia project, also known as Vitania Tel Aviv, comprises three 40-story mixed-use towers at the southern entrance to Tel Aviv's business district. It includes extensive office and retail space, two gyms, and 130 residential apartments. Current tenants include gaming company Moon Active and the Gornitzky law firm, with Bank Hapoalim set to move in after purchasing one of the towers in 2021 for 970 million shekels.

This offer follows Abu's recent involvement in another significant real estate transaction. In July, Ari Real Estate agreed to acquire a 33% stake in G City from Chaim Katzman for 661 million shekels. That deal reportedly collapsed due to disagreements over partnership terms, including clauses allowing for unilateral cancellation and the replacement of controlling shareholders.