Israeli Businessman Gad Ze'ev Negotiates $550 Million Buyback of Gadot Group

Gad Ze'ev, a businessman from Haifa, is in advanced talks to repurchase Gadot Group, a key partner in Haifa Port, for approximately $550 million. This potential acquisition comes 27 years after Ze'ev sold his stakes in the company. Ze'ev is leading a group of investors in negotiations to acquire all shares of Gadot, currently owned 60% by Tene Investment Funds and 40% by a consortium led by LBH Group. A letter of intent was signed about ten days ago, with Jefferies Investment Bank facilitating the sale process and connecting Ze'ev with other investors. Ze'ev has not commented on the negotiations.

Gadot's main asset is its 30% stake in Haifa Port, where the Indian Adani Group holds the remaining 70%. The company also operates in maritime shipping, chemicals, energy, and storage solutions, with subsidiaries in the Netherlands, Belgium, the US, and Germany. Tene has been seeking to exit its investment in Gadot for some time, having acquired the company 12 years ago for $73.5 million. The fund attempted an IPO in 2020 valuing Gadot at $300 million but withdrew after investors demanded a lower valuation. In 2021, Tene sold 40% of Gadot to LBH at a valuation of $280 million.

In 2022, Gadot partnered with Adani to win the privatization tender for Haifa Port for 4.2 billion shekels, a price considered high but inclusive of 2.6 billion shekels held in the port's treasury. The government has restricted withdrawal of these funds until a deep-water berth is constructed to accommodate larger container ships and enhance competition with the nearby Chinese-owned Bay Port, which has been steadily increasing its market share at Haifa Port's expense. A revised agreement expected in 2024 may allow dividend withdrawals before the berth's completion, contingent on a 1 billion shekel deposit for the berth's construction.

Gadot was founded in 1957 by the Yohananoff family and has undergone several ownership changes, including a failed takeover attempt by Ze'ev in 1998-1999. Ze'ev previously owned 36% of Gadot but sold his shares back to the Yohananoff family and Delek Group in 1999. The company was acquired by Ample Group in 2007 and later sold to Tene in 2014. Ze'ev is known for his significant 1999 investment in Bezeq and has held stakes in various companies, including the Grand Canyon mall in Haifa and Elisha Hospital. The outcome of the current negotiations could mark a major comeback for Ze'ev in the Israeli business landscape.