Alex Sapir has another chance to do something he failed to pull off three years ago — seize greater control of his eponymous real estate investment firm by buying out its outstanding shares and going private. In the middle of a pandemic that has slammed stock prices on the Tel Aviv Stock Exchange, where the firm is listed, may be just the right time.
An LLC controlled by Alex Sapir is offering to buy up about 5 million shares of the company, Sapir Corp., at 3 Israeli shekels apiece, or about $4.3 million in total, according to a disclosure published Sunday in Tel Aviv. Those shares represent 13.29 percent of the company’s market capitalization.
Sapir and business partner Gerard Guez already own 86.71 percent of the company combined — two Sapir-controlled entities control about 62 percent of the total shares, while a trust for Guez’s benefit holds about 24 percent.
Sapir Corp.’s stock price has jumped sharply in the past few days, from 2.62 shekels a share last week to 3.71 shekels at the latest close. The disclosure notes that the average stock price over the past six months was 3.51 shekels.
Bank Leumi will be coordinating the buyout process. In 2017, the bank provided a $90 million loan for the construction of Sapir Corp.’s 12-story, 16-unit luxury condominium in Miami called Arte. With only three of the units sold — to Alex Sapir’s sister, mother and Guez — the company just secured a 12-month extension to pay back the loan and secured lender approval to rent the units to cover costs and provide flexibility in light of the coronavirus pandemic.
Sapir Corp. is also planning to sell a nearly 2 million-square-foot mixed-use development in Miami’s Arts & Entertainment District, and owns the 264-key NoMo Soho hotel in New York City.
Sapir Corp. shareholders have until May 31 to accept the buyout offer, which will only take effect if two conditions are met: more than 95 percent of all shareholders, as well as more than half of the shareholders whose shares are being acquired, need to approve of the transaction.
Sapir declined to comment, citing securities regulations.
Sapir’s previous attempt at a stock buyout in 2017, when the company was still known as ASRR Capital, failed to garner sufficient demand. The company had first offered to buy back its shares at 9.8 shekels apiece, before upping the offer to 10.8 per share or about $15 million in total, disclosures from the time show.
In the event that this second buyout attempt does not go through, the disclosure says, Sapir “reserves the right to work towards the erasure of the company’s shares by means of a reverse triangular merger.”
If Sapir Corp does go private, the firm will still be subject to disclosure requirements in Tel Aviv because of its roughly $36 million in bonds that are trading on the exchange, which are set to mature in 2022.