Israeli billionaire Idan Ofer has offloaded another slice of New York-listed container line Zim while striking a deal to hedge risk on another chunk.
Ofer’s New York-listed company Kenon Holdings said it had sold 5m shares in the Israeli shipping company for $110.6m, with Citigroup Global Markets as the broker.
The sale cut Kenon’s stake to 16.5%, worth $388m. Prior to the transaction, Kenon held 24.8m shares, or 20.7%.
Kenon has also entered into a two-year “collar” transaction with an investment bank involving another 5m shares.
The investment bank has been awarded a call option at an exercise price representing a premium to the closing price on 5 June, while Kenon has bought a put option at a discount.
“The collar transaction enables Kenon to retain exposure to the potential upside in Zim’s shares up to the call price while limiting the impact of potential decline in the share price,” Kenon said.
The deal will provide for cash proceeds of about $155m in the event the call option is exercised, and $100m to Kenon in the event the put option is declared.
The additional 5m shares represent 4.2% of Zim.
Zim’s stock price is down 12% at $19.54 in the past five days.
In January, Ofer cut his holding in Zim by about one-fifth when Kenon sold about 6m shares.
In June 2021, Ofer celebrated Zim’s New York IPO at his seashore residence near Tel Aviv.
Ofer talked about the liner operator’s fraught history and his involvement in past restructuring efforts.
He spoke of Zim’s long-standing links with the Ofer Group and, particularly, his late father, Sammy Ofer, and his contribution to the company.
Ofer singled out Zim president and chief executive Eli Glickman for his “leadership and vision”.
“Idan was the only person who believed in Zim even during the hardest times,” Glickman said.
