Dispute Threatens Real Estate Deal That Could End Haim Katzman's Control of G City

A major real estate transaction that would end Haim Katzman's control over G City, his lifelong business, is at risk of collapse amid internal disputes. Katzman, the current controlling shareholder of G City, reportedly reacted angrily after Tzachi Abu, controlling shareholder of Ari Real Estate, included Tanufort-Yashpro, owned by Kidan Dahari and Yaron Adiv, as equal partners in the deal without Katzman's prior knowledge. Close associates of Abu, Dahari, and Adiv accused Katzman of trying to sabotage the transaction, citing questionable moves such as unnecessary bond issuances and unauthorized golden parachute payouts just before Katzman's planned exit. They warned that if the deal closes, they may challenge some of Katzman's decisions at the upcoming shareholders meeting in September.

The deal, signed in early July, involves Ari Real Estate purchasing 26% of G City from Norstar, Katzman's holding company, for 661 million shekels at a 30% premium, with an option to buy an additional 7%. Upon acquiring 35%, Ari Real Estate would become the sole controlling shareholder, effectively ending Katzman's control. Abu added Dahari and Adiv's company as equal partners on July 21, transferring Ari Real Estate's rights to a special purpose vehicle jointly held by Ari Real Estate and Yashpro-Tanufort. Katzman was only informed of this after the agreement was signed, which he opposed.

Since signing, Katzman has taken several controversial steps, including advancing the appointment of G City Israel CEO Kalifa to group CEO earlier than planned, with a lucrative compensation package that some see as a safeguard against replacement by the new owners. The shareholders will also vote on Katzman's new compensation as he transitions from CEO to chairman, which would reduce his annual pay from 5.9 million to 1.5 million shekels.

Despite Abu's confidence in the deal, the sharp 28% drop in Ari Real Estate's stock price since the agreement raises doubts about its completion. The new partners appear to be entering the transaction on uneasy terms, with potential conflicts ahead at the shareholders meeting and beyond.