Billionaire Alfred Akirov Considers Taking Real Estate Firm Private
Translated & summarized from Ice by baba
Billionaire Alfred Akirov, 85, is considering taking his real estate company, Alrov, private due to low stock liquidity and undervaluation. He also sees the move as potentially helping him increase his stake in Clal Insurance. Akirov is developing a 180-unit apartment and commercial project in Herzliya, planning long-term rentals for tax and investment reasons. He remains bullish on the Israeli housing market and has no plans to retire or sell Alrov, with his son Georgi expected to continue the business.
The story in 6 lines · by baba
- Businessman Alfred Akirov is considering taking his real estate company, Alrov, private.
- Akirov cites low stock liquidity and market pricing not reflecting Alrov's true value.
- The move could help Akirov increase his stake in Clal Insurance by overcoming regulatory hurdles.
- He is developing 180 apartments and commercial space in Herzliya for long-term rental.
- Akirov believes the Israeli housing market has a significant supply deficit.
- He has no plans for retirement and his son Georgi is expected to continue the business.
Eighty-five-year-old businessman Alfred Akirov is considering taking his real estate company, Alrov, private, citing low stock liquidity and market pricing that doesn't reflect the company's value. Akirov believes the stock trades at only 70-80% of its actual worth and sees no need to remain a public company solely for stock trading. He stated that the company would continue to report its financials because it has bonds outstanding. Akirov confirmed that the funds for a potential buyout are available and would not require loans, reflecting his conservative approach to debt.
Market observers suggest this move could also aid Akirov's long-standing ambition to increase his stake in Clal Insurance to 30%, potentially overcoming regulatory hurdles related to concentration of ownership. Akirov noted that as a public company, he cannot acquire an additional 15% to gain control. Despite his real estate focus, Akirov is pursuing a major development in Herzliya on a 18-dunam plot he purchased in 1979. The site, currently housing a Tiv Ta'am supermarket generating 3 million shekels annually in rent, has received approval for two towers with 180 apartments and commercial space. Akirov estimates the land's current value at 400 million shekels.
However, Akirov plans to rent these apartments for 18-20 years, a strategy driven by both tax benefits, which allow for a 10-11% income tax rate as an approved enterprise, and a long-term investment view. He remains optimistic about the Israeli housing market, pointing to a deficit of at least 50,000 new apartments annually due to population growth, which could quickly absorb the current surplus of 80,000 unsold units. Akirov also dismisses claims that housing prices are excessively high, noting increased incomes and wealth generated by tech exits. He continues to be actively involved in business, stating that retirement would lead to illness and that his son, Georgi, is involved in the company and intends to continue his legacy. Akirov firmly stated that selling Alrov is not an option.
