ISA Chair Anat Guetta: “Today, the permits issued by the ISA allow the TASE to embark on a new path as a competitive, progressive business entity, in line with all countries in the western world. The TASE’s main function is to support the development of Israel’s economy. The former structure of ownership prevented it from optimally fulfilling its function. In our new world, Israeli citizens will benefit from a broad range of investment vehicles and from the success of the economy, and the Israeli economy will gain as a result.”
Guetta added: “This move complements the ISA’s actions to expand the public capital market and develop a market that is competitive, diverse, and accessible to the investor public.”
The ISA, headed by Chair Anat Guetta, approved the issue of ownership permits to international investors who are to acquire the majority of the shares in the TASE from its current members. These permits put in motion a change in the TASE’s structure of ownership. The TASE Change of Structure Law determined that within 5 years, the current TASE members, who are also its shareholders, will hold no more than 5% of TASE shares each.
In recent months, the ISA reviewed applications of several international investors for permits to own shares in the TASE. The outline presented to the ISA proposes a sale of 71.7% of the TASE shares by their current owners, to five international investors. According to this outline, the Australian investment fund Manikay Partners LLC will acquire and direct hold 19.99% of TASE Shares. The remainder — 51.7% — will be sold to four additional international investors, such that each of these investors will directly hold no more than 4.69% of TASE shares, and the remainder will be held for them by a trustee appointed for this purpose. The investors undertook to support a sale to the public of these TASE shares held for them in trust (which represent 31.7% of TASE shares), through a public offering to be initiated by the TASE in the future. In this manner, the TASE will become a public company with a more diversified control of ownership and greater transparency of operations. The four additional entities that were issued permits to hold means of control in the TASE Group are:
- Sunsuper PTY Ltd, permit to directly hold 4.69% of TASE shares;
- Moelis Australia Asset Management Ltd., permit to directly hold 4.69% of TASE shares;
- Dalton Investments LLC, permit to directly own 4.69% of TASE shares;
- Novo Nordisk Foundation, permit to directly hold 4.69% of TASE shares.
Based on the outline proposed by the TASE, the ISA also issued a permit to Mr. Moshe Terry, who was appointed trustee over 32.9% of TASE shares.
In the review process, consideration was given to several principles defined in the statute regarding the issue of TASE ownership permits, including considerations related to public interest, the reliability of the permit applicants, potential conflicts of interest, and the implications of the change on the proper and fair functioning of the TASE.
The sale of TASE shares will effectively separate TASE ownership from TASE membership, and is therefore expected to minimize conflicts of interest and achieve the purpose of the law. The change in its structure of ownership will allow the TASE to focus on its business in a manner that best serves its interests, the interests of its stock holders, and the interests of everyone who uses it services, and will allow it to direct its operations in a manner that is aligned with the needs of the entire market in a more efficient and competitive manner.
Furthermore, the entry of international investors will give global access to the TASE and the Israeli, which should assist in making the TASE more accessible to new companies, investors, and markets; and to contribute to an expansion of its membership base.
In these ownership permits, the ISA defined conditions and restrictions designed, among other things, to ensure the continuity of TASE operations and to prevent a decline in the scale of TASE operations or the fields in which it is active in a manner that undermines the proper functioning and mission of the capital market in Israel.
Following is the new structure of ownership after the sale of TASE shares: