Altshuler Shaham shareholders consider sale of controlling stake
Gilad Altshuler and Kalman Shaham are examining approaches from potential buyers for their 55.4% stake in the investment house, which manages $37 billion. A sale could give a new owner room to expand into businesses currently restricted by conflicts of interest with the group's private operations.
The controlling shareholders of publicly traded Altshuler Shaham Finance, Gilad Altshuler and Kalman Shaham, are considering selling their controlling stake in the investment house. Calcalist has learned that the possibility is being examined following approaches from several parties interested in acquiring control of the company.
Altshuler Shaham Finance is 55.4% owned by Altshuler Ltd., which is controlled by Gilad Altshuler, who holds 43.4%, and members of the Shaham family, who hold the remaining 44.12%. The family shareholders include Kalman Shaham, his wife Ilana, and their three children, Ran, Lior and Assaf. Yair Levinstein, CEO of the company's provident fund business, holds 14.8% of Altshuler Shaham Finance, while the remaining 29.7% is held by the public. The company manages approximately NIS 112 billion ($37.3 billion) in assets and has a market capitalization of about NIS 1.4 billion ($466.7 million). Ran Shaham serves as chairman.
Daniel Benin-Barr and Galia Barr-Wilf each hold 4.9% of the company. They are the children of Shlomo Barr, the controlling shareholder of STG, a Tel Aviv-listed importer of electronic components and equipment.
A sale of the 55.4% controlling stake could be worth around NIS 1 billion ($333.3 million), based on a potential control premium, compared with a current market value of approximately NIS 785 million ($261.7 million) for the stake. Levinstein's holding is currently worth about NIS 210 million ($70 million).
A new controlling shareholder could also expand Altshuler Shaham Finance into activities that it is currently restricted from pursuing because of conflicts of interest with Altshuler Ltd., the private company. These activities could include hedge funds, membership in the Tel Aviv Stock Exchange and mutual funds.
A few weeks ago, Calcalist asked an Altshuler Shaham spokesperson about the possibility of a sale. The spokesperson said that no such consideration was on the agenda. However, Altshuler is known to have received approaches from potential buyers and has not ruled out the possibility of selling.
A month ago, Gilad Altshuler told Calcalist that he had reduced his involvement in the day-to-day management of Altshuler Shaham and relinquished a number of responsibilities in an effort to decentralize decision-making across the organization. He said the investment house had undergone a management reorganization over the previous two years. The move now appears to have been part of a broader process in which Altshuler reduced his involvement ahead of a possible sale of control. His partners are also expected to participate in any sale.
It is not yet clear whether Levinstein would sell his stake as part of a transaction. Capital market estimates suggest that, because he is considerably younger than Altshuler, he is more likely to retain his shares and remain CEO under a new controlling shareholder. As far as is known, Altshuler is already in talks with at least one potential buyer, although negotiations remain at an early stage.
Less than a year ago, Altshuler and Shaham sought to merge their public and private operations. As part of a major related-party transaction, they considered selling the private company's activities to the public company and commissioned valuations for that purpose. The transaction ultimately did not move forward, apparently because of differences over the valuation of the businesses.
The private company operates mutual funds, with approximately NIS 20 billion ($6.7 billion) in assets under management, as well as investment portfolio management, hedge funds, stock exchange membership activities, digital currencies, trading through Horizon, and executive compensation plan services. The value of these activities is estimated at NIS 400 million to NIS 450 million ($133 million to $150 million). If they sell their holdings in the public company, Altshuler and Shaham are expected to focus on these private operations.
Altshuler Shaham was founded in 1990 by Gilad Altshuler and Kalman Shaham. Between 2018 and 2022, it was the leading public provident and pension company in Israel's provident market. Since then, however, it has suffered a significant reversal, with customers withdrawing NIS 140.3 billion ($46.8 billion) over five years. The company has fallen from first to third place in the provident market and surrendered roughly 20% of its market share.
In recent months, however, Altshuler Shaham has returned to posting stronger investment returns and has again been near the top of the pension performance tables.
The deterioration in the company's position has also weighed on its market value. More Gemel and Pension is already valued at more than NIS 2 billion ($666.7 million), while Meitav is valued at approximately NIS 10.7 billion ($3.6 billion), far above Altshuler Shaham Finance's market capitalization.
