Hagag Group Sells 7.5% Stake in Rani ZIM Malls for $20 Million
Translated & summarized from Ice by baba
The Hagag Group is selling a 7.5% stake in Rani ZIM Malls back to Rani ZIM Holdings for NIS 75 million, valuing the company at NIS 1 billion, a 30% premium over its market price. The deal, expected to close within 30 days, will reduce Hagag's stake to 22.16% but maintain joint control. Rani ZIM also has an option to buy an additional 7.5% stake.
The story in 5 lines · by baba
- Hagag Group sells 7.5% of Rani ZIM Malls for NIS 75 million at a 30% market premium.
- The deal values Rani ZIM Malls at NIS 1 billion, with NIS 26 million for debt repayment.
- Hagag's stake will fall to 22.16%, but joint control with Rani ZIM will be maintained.
- Rani ZIM has an option to purchase an additional 7.5% stake within 11 months.
- The partnership between Hagag and Rani ZIM began in December 2024.
The Hagag Group has signed an agreement to sell a 7.5% stake in Rani ZIM Malls back to Rani ZIM Holdings for NIS 75 million (approximately $20 million). The deal values the mall company at NIS 1 billion, reflecting a premium of about 30% above its current stock market price. Of the total proceeds, NIS 26 million will be allocated to repay company debt, with the remaining approximately NIS 49 million (before tax) going to Hagag.
The sale is not expected to have a significant impact on Hagag's financial results. The transaction is slated for completion within 30 days, with Rani ZIM holding an option to extend this period by an additional 15 days. The shares being sold are currently pledged to a financing entity securing the company's obligations.
Following the sale, Hagag Group's holding in Rani ZIM Malls will decrease to approximately 22.16%. Despite the reduced stake, both parties have amended their shareholders' agreement to ensure continued joint control of the company. This includes equal rights to nominate directors and a requirement for unanimous decisions in preliminary meetings.
Hagag has also granted Rani ZIM an option to purchase an additional 7.5% of the shares within 11 months of the deal's completion. This transaction marks a new chapter in the business relationship between Hagag Group and Rani ZIM, which began in December 2024 when Hagag first invested in Rani ZIM Malls as part of a move to acquire joint control.
In a recent interview, Hagag Group owner Tzachi Hagag commented on the acquisition of Rani ZIM, noting that "We try to do deals that unlock value. They all unlock value, both Rani ZIM and Adi ZIM's urban renewal projects. In the end, we make good acquisitions and the market likes them." Hagag's initial entry into the partnership aimed to strengthen Rani ZIM Malls' capital structure, create synergy between Hagag's residential and commercial real estate development capabilities and ZIM's portfolio of neighborhood and regional malls, and help reduce leverage.
