Recanati Family Gains Control of Maccabi Tel Aviv Basketball Club via Right of First Refusal

The Recanati family recently acquired a 29% stake in the Maccabi Tel Aviv basketball club from the Federman family for $50 million, increasing their ownership to 58% and gaining control of the club. This significant Israeli sports deal was enabled by the Recanati family exercising their right of first refusal (ROFR) as stipulated in the shareholders' agreement, preventing Eric Stillman, founder and CEO of Rapid, from purchasing half of Federman's shares.

The ROFR mechanism allows existing shareholders to match a third party's purchase offer before shares are sold externally, preserving ownership control within the group. Legal experts explain that while this right can complicate sales by requiring potential buyers to invest in due diligence and negotiations without guarantee of purchase, it also serves as a strategic tool to consolidate ownership. In this case, the Recanati family benefited from Stillman’s upfront costs and secured the entire 29% stake rather than just half.

The ROFR clause is typically included in a company’s bylaws or shareholders’ agreement, with a set timeframe for exercising the right, 30 days in the Maccabi Tel Aviv deal. Lawyers note that the right usually must be exercised on an all-or-nothing basis to avoid partial acquisitions. Revoking a notice to exercise ROFR is generally not allowed unless explicitly permitted in the agreement.

Other recent examples of ROFR use include Amos Luzon preventing the sale of Phoenix’s 10% stake in the Dorad power station to Menora Mivtachim and Adletek, and the founders of the urban renewal company Anashim Ha’ir blocking businessman Tzahi Abu from acquiring a 41.3% stake held by Rothstein, thereby increasing their own holdings to nearly 80%. These cases highlight the importance and impact of ROFR in Israeli corporate transactions.