G City Deal Collapses as Chaim Katzman Cancels Sale to Tzachi Abu and Partners
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Chaim Katzman canceled the sale of a controlling stake in G City to Tzachi Abu and partners after reviewing a related agreement, causing the deal to collapse. The buyers are expected to receive their deposit back, and Norstar’s stock dropped amid the fallout. The deal’s failure complicates Norstar’s debt repayment and G City’s planned capital raise.
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- Chaim Katzman canceled the G City stake sale to Tzachi Abu and partners after reviewing a related agreement.
- Buyers will likely get back their 20 million shekel deposit with unclear next steps.
- The deal involved selling 26% of G City shares for 661 million shekels, with plans for an additional 7%.
- Norstar’s stock fell 4.5% amid speculation about the deal’s collapse.
- Norstar needed the funds partly to repay bondholders and support G City’s capital raise.
- Discount Capital Hitum was set to earn a 10 million shekel fee if the deal closed.
The planned sale of a controlling stake in G City has been definitively canceled after Chaim Katzman decided to terminate the deal, informing Tzachi Abu of his decision. Katzman’s cancellation followed his review of an agreement between Ari Nadlan and Yespro, controlled by Kidan Dahari and Yaron Adiv, which stipulated that the buyers would quickly seek control of G City shares from Norstar, Katzman’s holding company. The buyers are expected to receive back their 20 million shekel deposit, though it remains unclear if they will pursue any legal action.
Under the original terms, Ari Nadlan and Yespro were to acquire 26% of G City shares from Norstar for 661 million shekels, with plans to purchase an additional 7% in a second phase that they sought to advance. Katzman requested the agreement between Abu and Dahari/Adiv last Friday; initially, Abu refused to share it but eventually complied. Katzman expressed disappointment that Abu had brought in Yespro-Tanofort as a partner, likening the situation to the biblical story of Jacob waking up married to Leah instead of Rachel.
The deal’s collapse impacted Norstar’s stock, which fell 4.5% amid speculation about the deal’s failure. Norstar, the current controlling shareholder of G City, needed the 661 million shekels from the sale partly to repay bondholders. Of that amount, 280 million shekels were to be reinvested in G City through a planned capital raise of about one billion shekels following the deal’s completion. Norstar’s recent statements indicated cautious evaluation of Yespro’s involvement without endorsing the change in the deal structure.
Katzman now faces a complex situation as Norstar requires the deal proceeds to settle debts, and G City depends on the expected capital injection. Discount Capital Hitum chairman Tzachi Sultan, serving as Norstar’s investment banker and advisor, was poised to earn a 10 million shekel fee upon the deal’s completion. The deal’s failure leaves the future uncertain for all parties involved.
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