Shikun & Binui Engaged in an Agreement and an Option Agreement for the Sale of its Shares of ADO Group

AIRPORT CITY, Israel, Jan. 28, 2019  /PRNewswire/ -- Shikun & Binui Ltd. (TASE: SKBN.TA), a global construction and infrastructure company headquartered in Israel, today announced that following its press release issued on December 20, 2018, Shikun & Binui Ltd. ("the Company") made the following statement:

1. Today, January 28, 2019, the Company entered into an agreement for the sale of 2,751,200 shares of ADO Group Ltd. ("ADO"), constituting 10% of the issued capital of ADO, at a price of NIS 86 per share of ADO ("the Agreement" and "the Acquisition Transaction", respectively), to a corporation which, to the best of the Company's knowledge, is incorporated in Luxembourg and is controlled indirectly by a institution managed for the family of the late Sir James Goldsmith ("GO").

The completion of the acquisition is subject to several dependent conditions, one of which is the sale of a further 20% of the share capital of ADO held by the Company (the "Condition Dependent Shares") within 120 days of the signing of this agreement. The Company however, maintains the right to fully or partially waive the fulfillment of this particular condition.

The agreement also includes a mechanism that governs the sale of 2,751,200 ADO shares to a buyer who will be determined by GO (including a purchase by GO itself), provided that the sale of these ADO shares will be at a price of not less than NIS 87, and on terms substantially similar to the terms of the existing agreement ("the Additional Sale"). For the avoidance of any doubt, if the Additional Sale is executed, the shares sold as part of the Additional Sale will be considered as part of the Condition Dependent Shares.

2. Furthermore, the Agreement provides that each of the parties will have the right to cancel it, if within seven days from the date of its signing, the Company does not sign an additional agreement which is unconnected to the above-mentioned Additional Sale, for the sale of 10% of the shares of ADO. The Company does expect that within a few days it will sign such an agreement (the "Additional Agreement"), which is as part of the sale of the Condition Dependent Shares. This said-information is forward-looking and the realization of which is uncertain.

3. As part of the agreement, the Company made an undertaking to GO, that for a period of thirty days from the signing date of the agreement, the Company will not enter into any transaction for the sale of all or part of the shares held by it, including by way of granting an option or creating a lien, excluding the Company's engagement with regard to the Additional Agreement and the Additional Sale. In addition, at the time of sale, the Company has agreed to grant GO the right of first refusal over various periods for the sale of its remaining ADO shares.

4. In addition to the above, yesterday, on January 27, 2019, the Company entered into an agreement with Dune International S.A.R.L. ("Dune" and "the Option Agreement", respectively), whereby the Company granted a Call Option to Dune to acquire 2,062,405 shares of ADO from the Company, constituting 7.5% of the issued capital of ADO and which are not counted as the Condition Dependent Shares,  the Additional Sale shares and the Additional Agreement shares (the "Option Shares"), at a price of NIS 88 per share. The Option could be exercisable by Dune over the course of a year commencing at the earliest of either the date of completion of the acquisition, or the completion date of the transaction that is the subject of the Additional Agreement as mentioned in section 2 above. The Option Agreement also grants various rights of first refusal over various periods to Dune in connection with the sale of the ADO shares by the Company, commencing from the signing date of the Additional Agreement.

5. If,  and when, the transactions with GO are completed, and the Additional Sale and the Additional Agreement are signed and completed, the Company will have therefore sold a 30% stake of shares in ADO (and it is again emphasized that there is no certainty of that), the Company will receive a total consideration of NIS 720 million, recording a profit before tax of NIS 480 million (on the basis of an average share price of NIS 87 per share over all the transactions).

In the event that the Company partially waives the dependent condition of the transaction with GO, in such a way that the Company only sells 20% of ADO shares (that is, without the Additional Sale transaction or the Additional Agreement), based on the same above price considerations, the total amount received will be NIS 480 million and the Company will record a pre-tax profit of NIS 320 million.

6. Since the entry into force of the Agreement is subject to various conditions, and the entry into force of the Option Agreement is also contingent on various dependent conditions, there is no certainty that the said agreements will in fact enter into force and/or be completed, and that any sale of ADO shares will in fact be made by the Company. 

About the Shikun & Binui Group

The Shikun & Binui Group is a global construction and infrastructure company that operates in Israel and internationally in seven segments: 1) infrastructure and construction contracting outside of Israel; 2) infrastructure and construction contracting within Israel; 3) real estate development within Israel; 4) real estate development outside of Israel; 5) renewable energy; and 6) concessions. The Group's activities focus on large, highly complex projects carried out for entities in private and public sectors with a focus on sustainability.

This summary announcement was prepared solely for the convenience of the reader and does not replace Shikun & Binui Ltd.'s (hereafter – "the Company") full report. The information contained in this announcement is, by its nature, incomplete. All of its contents are provided as a supplement to the Company's report, and are subject to the declarations therein stated. This announcement includes forecasts, assessments, estimates and other information relating to the Company or its subsidiaries, or to other parties or to future events and matters, the extent of whose realization is not certain and is not under the sole control of the Company (forward-looking information, as defined in the Securities Law-1968). The key facts and data serving as the basis for this information are facts and data, among others, related to the current status of the Company and its businesses, facts and data relating to the current status of the operating segments in which the Company engages in its areas of operation, and other macroeconomic facts and data known to the Company on the preparation date of this presentation.

It is understood that forward-looking information does not constitute a fact and is based solely on subjective assessments. Forward-looking information is uncertain and for the most part, is not under the Company's control. The realization or non-realization of the forward-looking information will be influenced, among others, by the risk factors that characterize the Company's operations, as well as developments in the general environment and external factors that impact the Company's operations. The Company's future results and achievements could differ significantly from those presented in this presentation. The Company is not obligated to update or modify the said forecast or assessment, and is not obligated to update this announcement. This announcement does not constitute an offer to purchase the Company's securities or an invitation to receive such offers. An investment in securities in general, and in the Company in particular, carries risk. One must take into account that past data do not necessarily indicate future performance.