Israeli Investors to Sell Caesarstone Shares

MENASHE, Israel – An investment firm that provided key financing to Caesarstone in the mid-2000s is looking to cash in as the quartz-surfaces company’s stock price is riding high.

Documents filed with the federal Securities and Exchange Commission (SEC) this month show that TENE Investments Funds plans to sell most of its Caesarstone stock (NASDAQ:CSTE) holdings.

A prospectus registered this morning shows the Tel Aviv-based capital firm selling 7,387,500 of its common (or ordinary) shares, reducing its total ownership from 23.1% to 1.7%.

Kibbutz Sdot-Yam, the communal society with the largest share of Caesarstone ownership, would also sell 950,000 of its current 18.7 million shares. The kibbutz would retain majority control with 51.4% of company common stock.

The sales involve registered stock and won’t dilute the book value of the shares.

Rumors of a large Caesarstone stock sale began circulating last fall in Israeli media. The Tel-Aviv daily Haaretz noted early last month that TENE might sell its stock.

TENE invested $25 million in Caesarstone in a private-equity deal in July 2006, and picked up an additional stake in the company in 2010; Caesarstone used the original financing to increase production in its manufacturing plant at Kibbutz Sdom-Yam. Haaretz pegged TENE’s total investment at $37 million as of last month, with an $8 million return in dividends.

Based on today’s opening NASDAQ share price of $24.29, TENE’s sale would gross $179.4 million for the investment firm. The kibbutz’s sale would yield $23 million.

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