Real estate company Israel Canada Ltd. (TASE: ISCN), controlled by founders Barak Rosen and Assaf Tuchmeir, is gaining ground in its takeover of properties belonging to Eurocom Real Estate, controlled by Shaul Elovitch, which is currently in receivership. The company today reported that it was in advanced negotiations to acquire Eurocom Real Estate’s 37.5% share in the Tel Aviv Midtown project for NIS 150 million.
Israel Canada, which already owns 37.5% of the offices and residential project, has been trying for some time to increase its share through the purchase of Eurocom’s stake. Together with Electra Ltd. (TASE: ELTR), another partner in the project, Israel Canada petitioned the court in April for declaratory relief stating that they were entitled to buy these holdings.
The Midtown project, located in central Tel Aviv on Begin Road next to Shaul Hamelech Boulevard, has two towers: one for offices and one for residences. It is one of Israel Canada’s more prominent projects.
In addition to its efforts to acquire Eurocom’s share of Midtown, Israel Canada is also trying to buy 57% of the rights in Eurocom House, located adjacent to the Israel Diamond Exchange in Ramat Gan, but it is having to bid against the other holders of rights in the property.
Israel Canada already signed a NIS 66 million purchase agreement in June with the receiver for the property. The agreement was later invalidated because of the refusal rights of Eurocom’s partners in the property, but was then restored to Israel Canada because the partners were unable to finance the purchase.
Last month, Israel Canada informed the TASE that one of the minority shareholders in the property had requested a restraining order for the deal. There have been no subsequent announcements.
Eurocom House is a four-storey office building at 2-4 Dov Friedman Street in Ramat Gan. The building, which has 2,000 square meters, currently houses the Eurocom group’s management. This area, however, has a substantial upside, because the plans envision the construction of a 30-storey office tower, and as far as is known, Israel Canada is planning to increase that to 50 floors on the site.
Most of Israel Canada’s business consists of residential projects and managing buyers’ groups in the center of the country, a field in which it has been one of the most prominent companies in recent years. The company’s share price has declined 20% this year, pushing its market cap down to NIS 750 million.