“The economy will recover in the third quarter and Sela Capital will be there” – the capital market

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, Dudu Zabida, wanted to buy the Harit Foundation

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. He sought to convene the board of directors and allow a change of clauses in the bylaws, to allow the company to acquire the Reit Fund. Sela’s management, led by the chairman of the board, Shmuel Selvin and CEO Gadi Elikam, saw a hostile takeover. They disliked the idea and went into battle over the minds and hearts of non-stakeholders, who would have needed 75% support to approve the proposal to change the company’s bylaws and put the structure in the back door. They succeeded. Despite seemingly tempting proposals of structure, the fund holders voted against it.

The two-month saga ended when 72% of Sela’s investors decided to reject the offer. Sela Capital shares fell close to 4%, as a correction to the increases resulting from the premium that was implied in the proposal for a structure.

“The economy will start to recover in the 3rd quarter and we will be there”
“A structure offered two proposals,” explains Shmuel Slavin, chairman of the fund, “the first was to repeal the clause in the bylaws that could not be approved to take over the company and the second was to turn the company into a general company so that it ceased to be a REIT fund.”

Why did investors reject the offer?
“Four main reasons. Some investors thought the offer was not attractive enough. Households have decided they want the company to remain a REIT fund. This is a clean management without a core of control, because REIT funds must not have more than 10% stakeholders.

“The third reason is that this is a company with managerial responsibility that distributes dividends every quarter, and the fourth reason is that the fund only invests in income-producing assets and they did not want to move to being part of a company that does not pay dividends and does not invest its money properly.”

Why did you decide to lower the management fee, even though you stated that you would not do so?
“Look, we are constantly growing and we decided to go towards our customers / investors. There is a false legend here that the management company takes a lot of money. All our management expenses stand at NIS 26 million on assets of 3.5 billion.

“The management company is part of the management and general expenditure, and is only 0.8% of the total assets, while with entities it ranges from 0.8% to 1%, so we are at the low threshold. Lowering the management fee is not a drama at all for us.

Do you see that customers and tenants are in difficulties?
“We strongly believe that towards the middle of 2021 or in the third quarter, the economy will begin to return to normal and Sela Capital will be there. In Corona, we have suffered very little and this quarter, real estate will also return and we are with it. Whoever is in a difficult problem, we are going towards him. Yes, there are those who have difficulty, but they are on the margins. ”