Shikun & Binui jumps on huge Texas deal

Shikun & Binui Holdings Ltd. (TASE: SKBN) share price is up 25.95% on the Tel Aviv Stock Exchange (TASE) today and its Series 8 & 9 bonds are up more than 5% after the company reported that its US subsidiary had signed an agreement to sell its rights in the franchisee for the Texas toll lane projects (SH 288) for $425 million. Shikun & Binui invested $100 million in the project, so that it will enjoy returns of more than four times its investment in just over five years.

The real estate and infrastructures company reported that it signed the deal after receiving an offer for its 21.6% stake in the Texas project at the start of the year. The offers was received from its partner in the Texas project, Spanish company ACS.

Shikun & Binui did not detail the cash flow and profit that can be expected from the sale. The company has estimated in the past that the deal would produce a net cash flow of NIS 1.2 billion and capital gains of over NIS 1 billion. The company said that, “Completion of the deal is subject to the existence of conditions in similar transactions, including receiving regulatory approvals.

SH 288 is a main approach road to central Houston and to the Texas Medical Center. The area suffers from heavy traffic congestion, particularly in the morning and evening, with average traffic density of 150,000-180,000 vehicles daily.

The toll lanes project included the reconstruction of a main interchange between SH 288 and a Houston ring road, and the addition of fast toll lanes on a 16 kilometer section from the center of Houston to the border between Harris County and Brazoria County.

Shikun & Binui, controlled by Naty Saidoff and managed by CEO Tamir Cohen, has seen its share price fall 57% over the past year before today, and its market cap shrink to NIS 3.9 billion.

Published by Globes, Israel business news – en.globes.co.il – on April 2, 2023.

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