Gazit Founder Haim Katzman Seeks to Give Up Control of G City

Businessman Haim Katzman, 76, is moving to relinquish control of G City, the real estate company he founded more than three decades ago. Until recently, he had fought to keep control of the firm, which owns and operates shopping centers in Europe, Israel and Brazil.

Norskstar, the holding company through which Katzman controls 54% of G City, told the Tel Aviv Stock Exchange that it wants to reduce its stake below the 25% threshold needed for control and is seeking a strategic buyer. Norskstar hired Discount Capital to handle the process. G City is currently valued at about 1.9 billion shekels, so dropping control would require selling roughly 30% of the company, worth about 600 million shekels. Norskstar said it does not plan to exit entirely, but wants to sell part of its holdings to generate significant proceeds, strengthen its capital structure, and possibly spin off G City’s subsidiaries without creating a prohibited three-tier public-company pyramid.

Market estimates say the most likely step is an IPO of G City Israel, which accounts for about 13% of the group, and possibly also G City Europe in Poland, which is about 20% of the business. It is not yet clear whether one buyer will purchase the shares and become the new controlling shareholder, or whether several buyers will leave G City without a control block. Shares of Norskstar and G City jumped sharply after the announcement.

Analysts at Leader Capital Markets said an Israel IPO looks like the most plausible first move, given assets worth about 4.5 billion shekels, with a later possibility of floating the Poland business. They said such steps could bring in substantial capital, reduce leverage further, and help G City reach a strategic target of about 50% leverage by 2028. For Norskstar, selling part of its stake would also help it repay financial obligations, while still leaving it with material influence but no control.

The move surprised Katzman’s partners in Norskstar, Barak Rosen and Asi Tuchmaier of Israel Canada, whose company is itself moving toward a merger with Acreo. Four years ago, Israel Canada bought 10% of Norskstar and appeared to be preparing a takeover, prompting Katzman to sell it another 12% in a truce. He later tried to distribute G City shares as an in-kind dividend to block any takeover, but abandoned that plan after Rosen and Tuchmaier offered to buy Norskstar at a 2 billion shekel valuation. Rising interest rates and waning market confidence then hit both companies hard. Norskstar now trades at about 500 million shekels, a quarter of that earlier offer, and Israel Canada’s paper loss on the investment is estimated at about 250 million shekels.

Katzman also cemented control through an agreement with another investor, Yitzhak Sela, who now holds 6.25% of Norskstar. In the difficult years, the company sold its private jet, its bond yields surged to junk levels near 40%, and Katzman led asset sales totaling more than 7 billion shekels across Europe, Russia, the United States, Brazil and Israel to cut debt. Even after these disposals, G City still carries more than 20 billion shekels in debt, and Maalot says its leverage is about 75% and should fall to 50% by 2028.