Huge Exit for Yakir Gabay in Germany: TLG Acquires 10% of AroundTown for $1.14 Billion

A real estate deal between two Israelies in Germany brings one of them, Yakir Gabay, to list one of the biggest exits of an Israeli developer of all time.

German real estate firm TLG Immobilien AG, acquired a 9.99% stake in its rival AroundTown AG from Yakir Gabay (Avisco group), for about 1.02 billion euros ($1.14 billion). After this sale, Gabay’s stake in Aroundtown reduced to 17%. The sale will be priced at 8.3 euros per share.

The two companies started talks to merge the businesses.  The merged company is supposed to be worth € 13 billion and enjoy € 1 billion in revenue a year. The company may enter the Caches index, which includes the 30 largest companies traded in Germany.

Yakir Gabay, the founder of AroundTown, listed the shares in 2015 in both Euronext Paris and the Frankfurt Stock Exchange, at a company value of 1.6 billion euros.

TLG is a public company operating in Germany’s commercial offices and centers, mainly in the cities of Berlin, Frankfurt, and Dresden. TLG, which currently has properties worth 4.6 billion euros said it is evaluating a potential merger. The move would immediately add to its funds from operations, according to the company.

Its major shareholder is Amir Dayan (29.3%), the youngest brother in the family who owns Africa Israel Hotels. The Singapore government holds 9.25%.

“To­day’s an­nounce­ment is the first step to en­able the potential cre­ation of a pan-Eu­ro­pean com­mer­cial real es­tate market leader, fo­cused on Ger­many and the Nether­lands and geared to­wards of­fices and ho­tel, which are the most at­trac­tive segments in com­mer­cial real es­tate,” Avisco said in a statement.

TLG said it in­tends to seek representation on Aroundtown’s board as soon as possible.