Haim Katzman Challenges Tzachi Abu’s Entry Into G City Real Estate Partnership

Haim Katzman, the current controlling shareholder of commercial real estate company G City, appears to be opposing the planned entry of Tzachi Abu into the company through Ari Real Estate. Over the weekend, Katzman’s lawyers sent a letter to Abu requesting details of the agreement signed between Ari Real Estate and Yespro, a company owned by Kidan Dahari and Yaron Adib, less than two weeks ago. Abu’s intention to bring Dahari and Adib as partners in the G City deal seems to have prompted Katzman to reconsider the entire arrangement, casting uncertainty over the future of the agreement.

A source close to Abu told Globes that Katzman underestimated Abu’s capabilities, comparing him unfavorably to Barak Rozen, a previous investor alongside Assi Tuchmaier of Israel Canada who had entered a joint control agreement with Katzman that ultimately fell through. About a month ago, Ari Real Estate, controlled by Abu, sought to acquire a 26% stake in G City from Katzman’s Norstar company for 661 million shekels, valuing G City at 2.55 billion shekels, a 30% premium over its stock market value at the time. Katzman controls G City through Norstar, which holds about 54% of its shares.

The agreement was designed to gradually introduce Ari Real Estate into joint control of G City, with Katzman granting Abu an option to become the controlling shareholder. Katzman initially believed Abu would not exercise this option, partly because it would require consolidating G City’s financials with Ari Real Estate’s. However, Abu’s move to include Dahari and Adib as partners, enabling them to gain control without consolidating financial reports, surprised Katzman. Once Katzman realized Abu’s serious intentions to take control, he began taking increasingly assertive steps to undermine the deal, including raising a new bond series and advancing Karen Kalifa, Katzman’s longtime associate, to G City CEO earlier than planned.

Katzman’s legal demands for the agreement details between Abu, Dahari, and Adib are part of these efforts. Despite Katzman’s moves, Abu remains determined to gain control of G City, focusing primarily on its Israeli assets, such as G City malls, and its prime properties in Poland. Ari Real Estate stated it operates transparently and intends to fulfill all agreements, emphasizing that the inclusion of Yespro as a partner was conditional and aimed at enhancing company value for all shareholders. G City declined to comment.