G City Deal Collapses as Haim Katzman Cancels Sale to Tzachi Abu and Partners

The planned sale of a controlling stake in G City has been definitively canceled after Haim Katzman decided to withdraw from the deal. Katzman informed Tzachi Abu of the cancellation following his review of an agreement between Ari Nadlan and Yespro, controlled by Kidan Dahari and Yaron Adiv, which stipulated that the buyers would seek to quickly gain control of G City. The buyers, who had deposited a 20 million shekel deposit, are expected to receive it back, though it remains unclear if they will take any further action.

Under the original terms, Ari Nadlan and Yespro were to purchase 26% of G City shares from Norstar, Katzman's holding company, for 661 million shekels, with a planned subsequent acquisition of an additional 7%. Katzman became concerned after Abu, his original partner in the deal, brought in Yespro-Tanofort as a partner without Katzman's prior consent. Katzman expressed his disappointment with a biblical analogy, saying, "I went to sleep with Rachel and woke up with Leah," referring to an unexpected change in the deal's structure.

The deal's collapse impacted Norstar's stock, which fell 4.5% amid speculation the transaction would fail. Norstar needed the proceeds from the sale to repay bondholders, with 280 million shekels expected to return to G City through a planned capital raise following the deal's completion. The involvement of Yespro-Tanofort was only disclosed late, and Norstar's official statements were cautious, indicating they were still assessing the implications.

Katzman now faces a complex situation as Norstar requires the funds to settle debts, and G City depends on the capital infusion. Discount Capital Hitum, led by chairman Tzachi Sultan, which was advising Norstar and expected a 10 million shekel fee upon deal closure, is also closely monitoring developments. The deal's failure leaves the future of G City's financing uncertain.