B.S.R. shares transfer by Eitan Eldar: The buyer is a subsidiary of public company Vulcan

A transaction by Eitan Eldar in B.S.R. Engineering shares, initially described as an internal transfer, turns out to be more complex: the buyer, Auto-Glass, is a subsidiary of public company Vulcan Industries. The move, valued at ₪6.5 million, creates indirect exposure for Vulcan to...

Eitan Eldar, an interested party in B.S.R. Engineering, sold company shares for approximately ₪6.5 million to Auto-Glass. While initial reports indicated an internal transfer between companies controlled by Eldar, it transpires that Auto-Glass is a subsidiary of public company Vulcan Industries. This makes the transaction complex, as it grants Vulcan and its shareholders indirect economic exposure to B.S.R., even though voting power remains in the hands of B.S.R. Chairman Nachshon Kiviti.

The sale of shares in B.S.R. Engineering And Development (TASE: 2425) by interested party Eitan Eldar last week is now taking on a new and more complex light. While the original report by B.S.R. presented the move as an internal reorganization of Eldar's holdings, a deeper examination, also based on reports by Vulcan Industrial Vehicles (TASE: 262), reveals that the buyer in the transaction is a subsidiary of a public company. The disclosure turns what seemed to be a technical transfer into a transaction with broader implications, connecting capital magnates and exposing public company Vulcan to an investment in the real estate market.

As recalled, on October 4, B.S.R. reported an off-exchange transaction in the scope of approximately ₪6.5 million. Under the deal, Gevor Sport Holdings, wholly owned by Eldar, sold 608,933 B.S.R. shares at a price of ₪10.67 per share. The buyer, Auto-Glass Ltd., increased its holding in the company. Based on the footnotes in B.S.R.'s original report, according to which Eldar controls Auto-Glass via a management share, the transaction was perceived as a pocket-to-pocket transfer, without a material change in Eldar's economic exposure.

### The Vulcan connection and the new significance
This is where the story gets complicated and draws interest. Auto-Glass is not merely a private company of Eldar's; it is a key subsidiary of Vulcan Industrial Vehicles, a public company traded on the Tel Aviv Stock Exchange and controlled by the Biton family. A report published by Vulcan on October 11 regarding general meeting results mentions and emphasizes Vulcan's existence as a separate public entity, with public shareholders and its own controlling shareholders.

The implication is that the transaction executed by Eldar is no longer a private "reorganization." By selling the shares from his private company to a Vulcan subsidiary, he has effectively introduced an asset (B.S.R. shares) into the balance sheet of a public company. Now, the return on those B.S.R. shares will impact, even if indirectly, Vulcan's financial results and, accordingly, all of its shareholders, including the public. The move raises corporate governance questions, since Eldar, through his alleged control of Auto-Glass, led it to acquire assets from another company of his.

### Control and voting structure remain unchanged
It is important to emphasize that one central aspect of the transaction has not changed: actual control. Despite the financial maneuvering, the voting power attached to the B.S.R. shares in question is not in the hands of Eldar or Vulcan. Pursuant to a longstanding shareholders' agreement at B.S.R., Eldar and the entities under his control granted an irrevocable proxy to the company's chairman of the board and controlling shareholder, Nachshon Kiviti. This proxy enables Kiviti to vote on behalf of these shares at any general meeting of the company. Therefore, in terms of the balance of power at B.S.R., nothing has changed.

### Broad picture: A network of interests
The transaction exposes a complex web of ownership and interests in the Israeli capital market. It connects Eitan Eldar, a significant real estate interested party; Nachshon Kiviti, a dominant figure in the B.S.R. group; and the Biton family, which controls Vulcan, operating in the automotive and energy sectors. Now, indirectly, the battery and automotive company Vulcan holds a small stake in real estate development company B.S.R. This move, which initially looked like a technical report, demonstrates how financial maneuvers by interested parties can create unexpected connections between public companies from completely different fields, highlighting the importance of examining transaction details beyond the initial headline.