Founders of Israeli Urban Renewal Firm Seek Control by Buying Major Stake for 100 Million Shekels

The founders of the Israeli urban renewal company 'Anshei Ha'Ir' are aiming to regain control of the firm by purchasing the 41% stake held by its largest shareholder, the real estate company Rotshtein. This move follows a purchase offer made by Gefen Megurim, a competing urban renewal company owned by Tzachi Abu, to acquire Rotshtein's shares. Gefen Megurim valued Anshei Ha'Ir at 240 million shekels, implying about 100 million shekels for Rotshtein's stake, a 50% premium over the company's current stock market valuation.

The three founders, Ron Chen, Roy Dor, and Eran Hefetz, who collectively hold 38% of Anshei Ha'Ir, have exercised their right of first refusal under the company's control agreement and demanded immediate negotiations with Rotshtein. They argue that Gefen Megurim's offer undervalues the company despite being significantly higher than the current market price. The founders expressed confidence in the company's future growth and intend to increase their holdings to lead the company’s expansion beyond Tel Aviv and accelerate its growth.

Founded in 2007 by the three former fighter pilots, Anshei Ha'Ir specializes in urban renewal projects in the Gush Dan area. In 2018, Rotshtein, controlled by billionaire Yitzhak Mirilashvili, acquired a controlling interest in the company. If the founders complete the purchase, their ownership could rise to 79%. The company went public about a year ago with a valuation of approximately 250 million shekels, but its share price has since dropped over 35%, currently valuing the company at around 170 million shekels.

Anshei Ha'Ir currently manages over 60 projects in various planning and construction stages in the Gush Dan region. In the first quarter of the year, the company reported revenues of 46 million shekels, a 30% increase year-over-year, driven mainly by sales and project progress in Tel Aviv neighborhoods such as Meytlin, Amos, David HaMelech, and Remez. This growth was attributed to a significant marketing campaign. Despite the revenue increase, the company recorded an operating loss of 260,000 shekels, an improvement from a 624,000 shekel loss in the same quarter last year.