Real Estate Mogul Tzahhi Abu Declines GCity Deal, Cites 'Mistake in People'

Real estate magnate Tzahhi Abu has stated he would not reconsider the failed acquisition of GCity, even at half the price, attributing the deal's collapse to a "mistake in people" rather than the transaction itself. Abu, CEO and controlling shareholder of Ari Real Estate, had offered 661 million shekels for control of GCity from Haim Katzman, but the deal imploded within days after Abu brought in partners Yeshpro and Kidron Dahari. Abu explained that his initial interest in GCity stemmed from observing its performance for two years and even holding its stock personally. He saw potential for significant profit by improving and restructuring the company.

The negotiation process with Katzman began directly after Katzman advertised his search for a buyer. Abu claims Katzman initially approved him and directed him to work with Tzachi Sultan. However, disagreements arose over control, management expenses, and executive salaries. Abu stated he informed Katzman that management and general expenses would be halved, involving significant staff cuts and the sale of Brazilian and American operations, which reportedly troubled Katzman.

Abu believes Katzman initially thought a 50/50 partnership would prevent him from making drastic changes. The situation escalated when Yeshpro joined as a partner, leading Katzman to fear losing control. Abu alleges Katzman then took actions like issuing unnecessary bonds and increasing the CEO's salary with a golden parachute without his consent, intending to provoke him into canceling the deal. The final breakdown occurred when Katzman refused to include Yeshpro in the application to the Competition Authority, prompting Abu to cancel the agreement, emphasizing his aversion to conflict.

Despite the failed acquisition, Abu remains committed to his vision for Ari Real Estate, aiming to make it one of Israel's largest income-producing real estate companies. He also discussed his broader business portfolio, including other publicly traded companies and his family's long-standing real estate ventures in Ashdod, highlighting a disciplined approach to separating business and family interests and a focus on growth.