Israeli businessman Eli Azor was busy last week with the success of the vote on the formation of the board of directors of Tamar Petroleum (TASE: TMRP). On Wall Street, Azur and his partners completed the sale of online gambling company NeoGames (Nasdaq: NGMS) to Australian gaming and betting company Aristocrat Leisure (ASX: ALL) for a full $1.2 billion. Aristocrat paid $29.50 per share, a 130% premium, when the deal was first announced in May 2023.
NeoGames, founded in Luxembourg and operating out of Ramat HaHiyal in Tel Aviv, provides technology solutions and services to state lottery companies, helping them move their activities online. Meanwhile, its subsidiary Aspire, which merged into NeoGames in 2022, operates iGaming solutions, systems and services for online sports gambling and casino sites.
This is Aristocrat's second acquisition in Israel after purchasing Herzliya-based Plarium for $700 million from shareholders such as Gigi Levi-Weiss and Yitzhak Mirilashvili (owner of Channel 14).
Zahavi ceases to be a party of interest in 2023
Azur is one of the main beneficiaries of the closing of the sale of NeoGames with a 17.5% stake valued at $178 million. Other beneficiaries of the exit from the Israeli company include Barak Matalon, the company's director and co-founder of Aspire, and Ronnie Aran, who is also a director. Matalon owns a 28.1% stake in NeoGames worth $285 million, and Aran owns a 7% stake worth $71.2 million. NeoGames CEO Moti Malul owns a 1.4% stake worth $14 million.
Another veteran investor in NeoGames was the famous football agent Pini Zahavi, Azur's business partner in several projects. He ceased to be a party to the company in 2023 when his stake fell to 4.99% after selling the shares to his partners – Matalon, Azur and Aran. The selling price of Zahavi's shares was based on a mechanism linked to the average price of the Nasdaq stock exchange at that time. Assuming he remained with 4.99% and had not sold shares in the period since, Zahavi would have received approximately $50 million from the sale to Aristocrat.
An independent unit within the aristocracy
NeoGames went public on the Nasdaq at the end of 2020, at a time when Wall Street welcomed tech company IPOs with open arms. The IPO valuation was $419 million, and in the flotation both Azur and Zahavi sold several million dollars worth of shares. Anyone who bought shares during the IPO would have seen 73% returns on selling to Aristocrat.
NeoGames was founded in 2014 as a subsidiary of Aspire Global, which had gone public several years earlier on the Swedish Stock Exchange.
Both Azur and Zahavi sold shares during the IPO. In 2022, NeoGames and Aspire merged when NeoGames made an offer to acquire Aspire at a company valuation of $480 million.
At the end of 2023, NeoGames had 700 employees, including 221 in Israel. Last year, the company's revenue rose 15.6% to $192 million, and its GAAP net loss narrowed 4% to $18.3 million. Aristocrat has informed the ASX that following the acquisition NeoGames will be managed as an independent unit led by Malul, who will also join the management of the Australian company.
Tamar Petroleum Company shares worth NIS 500 million
In addition to his gaming interests, Azor also owns the Israeli daily newspapers Maariv and Jerusalem Post, Walla! News website and regional radio stations. Together with Zahavi, he owns Charlton Sports Channels.
Besides all this, one of Azur's successful investments in recent years was the purchase of shares in Tamar Petroleum, where he has a 25% stake. Three years ago, Azur bought a 22.6% stake in the company, one of the partners in the Tamar offshore gas field, for NIS 100 million from Delek unit NewMed Energy (TASE: NWMD) and has since increased his stake. He currently owns shares worth about NIS 500 million, a return of more than 300% on his investment.
Last weekend, Azor achieved a victory over Aaron Frenkel, another major shareholder in Tamar Petroleum, after a majority of the company's shareholders voted to keep the company's board of directors in its current composition.
Frenkel, who in recent years has completed particularly successful rounds of investments in stocks traded on the Tel Aviv Stock Exchange (first Aeronautics and then Bayside), failed in his attempt to insert his representatives into the board of directors of Tamar Petroleum, at the same time as the shareholders elected Eva Majibog Levy as the new independent director, who is seen as close to Azure.
Tamar Petroleum is a heartless company, owning 16.75% of the equity in the Tamar natural gas deposit. The company's chairman is Roni Bar-On, former finance minister, and its CEO is Barak Mashreqi. Frenkel and Azur are the largest shareholders with 24.6% and 24.99% respectively. Minora Insurance Group owns 12.45% of the shares (through its savings funds), and businessman Moti Ben Moshe owns 6.8%. The company's share price has risen by 130% in the past year and is trading at a market value of about NIS 2 billion.
Market sources believe that the attractiveness of the stock has increased due to the increasing demand for natural gas, as shown by the company’s reports for the year 2023 with a net profit of $50 million, an increase of 46% over the year 2022 (despite the reservoir being closed for more than a month at the beginning of the war). According to Tamar Petroleum’s bylaws, the company’s activity is limited to producing natural gas from the reservoir, and it is obligated to distribute profits.
During the Board of Directors vote, a new shareholder of Tamar Petroleum was revealed – a Hungarian investment fund called Repro I Capital, which according to estimates owns 3% of the shares.
Published by Globes, Israel Business News – en.globes.co.il – on May 2, 2024.
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