Markstone to buy 60% of Solomon

Agreed to invest NIS 300 million in company which bought one of Israel's largest mutual funds.

solomon capital 88 (photo credit: )
solomon capital 88
(photo credit: )
Investment fund Markstone Capital Group agreed to invest approximately NIS 300 million in Solomon Capital Markets to gain a 60 percent stake in the company which, just two weeks ago, bought one of Israel's largest mutual funds. Directors of E. Solomon Investment & Consultancy approved the sale of the brokerage subsidiary on Monday and at the same time gave their approval to allocate 20% of Solomon Capital Markets to investment company Tao Tsuot. Both agreements were made at a price of NIS 125 per share giving the company a market capitalization of NIS 175m., Solomon said in a statement. Also, Markstone and Tao will provide loans to Solomon with a combined amount of NIS 325m., each according to the proportionate holding it gains in the company. "In total, approximately NIS 500m. will be invested in Solomon," the statement read. Following the deal, shares in Solomon (the parent) jumped 11.4% to NIS 17.80 in Monday trade on the Tel Aviv Stock Exchange. In mid-October, Solomon purchased Poalim Mutual Funds (P.K.N.) from Bank Hapoalim for NIS 955m. PKN has a market share of 15.5% and has NIS 20.5 billion under its management in 74 separate funds. These add to the eight funds that Solomon Capital Markets has in its mutual fund business and the three provident funds in another unit. Founded in 1986, Solomon is managed by Amit Berger who earlier this year bought controlling interest in the company from its founder Eli Solomon. For Markstone, the deal marks its second major investment in almost as many weeks after the fund agreed to buy full control of book store chain the Steimatsky Group for over NIS 200m. Markstone became the biggest investment fund in Israel when, at the beginning of October, it raised $800m., adding to the $700m. it had previously earmarked for investment here. The fund is run in Israel by Ron Lubash and Amir Kess, who founded the fund along with its US-based chairman Elliot Brody. Other Markstone investments to date include a controlling stake in phone directory company Golden Pages; 40% of engineering company PRS Mediterranean; 20% of textile company Nilit; and its purchase of vegetable and seed producer Zeraim Gadera.