Altshuler Shaham Founders Explore Selling Control of Investment House

Founders Gilad Altshuler and Kalman Shaham are considering selling their controlling stake in Altshuler Shaham Financial Holdings, an Israeli investment firm. The exploration follows unsolicited acquisition offers received by the company's controlling shareholders. Altshuler Shaham Financial Holdings is 55.4% owned by Altshuler Ltd., in which Gilad Altshuler holds 43.4% and the Shaham family holds 44.12%. The publicly traded company manages NIS 112 billion ($30 billion) and has a market capitalization of NIS 1.4 billion ($380 million).

A sale of the 55.4% controlling stake could be valued at approximately NIS 1 billion ($270 million), based on the current market value of NIS 785 million ($210 million) for those shares. The acquisition could allow a new owner to integrate additional business activities, such as hedge funds and brokerage services, which are currently restricted for Altshuler Shaham Financial Holdings due to potential conflicts of interest with the private Altshuler Ltd.

Altshuler himself recently reduced his involvement in the firm's daily management, a move that appears to stem from his decision to explore selling control. His partners are expected to join in any sale. Yair Levinstein, who holds 14.8% of the company, may not sell his stake, with market speculation suggesting he might remain as CEO under a new controlling shareholder.

Altshuler Shaham, founded in 1990, was the leading provident fund company in Israel between 2018 and 2022. However, it has since experienced a significant decline, losing NIS 140.3 billion ($38 billion) in assets under management and dropping from first to third place in the industry. Despite this, the company has recently shown improved returns and is once again leading pension fund performance tables.

Discussions are reportedly in early stages, and Altshuler Shaham's spokesperson previously stated that a sale was not under consideration. However, Altshuler has reportedly received offers and has not ruled out a sale. A previous attempt by Altshuler and Shaham to merge their public and private operations less than a year ago did not materialize, likely due to valuation gaps.