Shoham no-shop was extended, but the data center is still not funded

Nofar and BSR published a seemingly small update on April 23: the Shoham no-shop period, a temporary exclusivity arrangement for negotiations, was extended again, now to May 31. This does not move the project into execution. It gives the parties more time, which means the transaction is still alive, but the economics of the data center are still not formed.

Shoham matters because it joins two different stories. For Nofar, data centers are a new growth engine that could use capabilities it already has in energy: land, planning, grid access and project finance. For BSR, Shoham is a possible land monetization and a potential gross-profit event, not a new operating business. That distinction matters. One side has to turn land and power infrastructure into an income-producing project. The other mainly needs a binding transaction and cash proceeds.

The starting point was built on February 3. The Shoham partnership, 39.96% held by BSR, together with other lease-right holders in a 32-dunam site, signed a non-binding no-shop principles document with Nofar. The proposed structure was a purchase of 51% of the lease rights for about NIS 181 million, with BSR's share of the consideration presented at NIS 37 million. The sellers would also receive a PUT option, a seller right to require a sale, over the remaining 49%, in cash or shares of a dedicated Nofar vehicle, at a value not lower than the transaction price plus 10% per year or according to a valuation, depending on the final documents if they are signed.

Exclusivity Was Extended, But The Contract Is Still Missing

The April 23 update changes only the timetable. Nofar said the parties extended the non-binding no-shop on April 21 through May 31. BSR published the same extension from its side, referring back to the February 3 and March 25 updates.

This is not just an administrative point. If the parties had abandoned exclusivity, the Shoham option would have weakened materially. If they had signed binding agreements, investors could start analyzing price, conditions precedent and financing with much more substance. The extension sits in the middle: it keeps the option active, but it does not add economic certainty.

The language in both filings is clear. There is no certainty that negotiations will be completed, no binding agreements have been signed, the terms remain subject to further negotiations, corporate approvals and regulatory approvals if required. That means Shoham should still be separated from an executed data-center project.

Land Is Only The Entry Point

A data center is not a regular land trade. The land price matters, but it does not determine the value by itself. The site needs significant power access, a final building permit or a clear planning route, a third-party services agreement for minimum DATA CENTER capacity, and eventually construction financing. Without those elements, there is still no NOI, meaning net operating income from the asset, and no cash-flow base.

The principles document already points to those bottlenecks. The PUT option is expected to depend on events such as a third-party DATA CENTER services agreement, a final building permit, final grid connection approval for the site at an agreed minimum power level, or an agreed period after signing. In other words, even the sellers' exit mechanism depends on the same pieces that are still missing from the project.

This is where Shoham differs from Nofar's core renewable-energy story. For Nofar, data centers are still defined as an early-stage activity that is not yet a reportable segment. The company separately describes early work around London, using new grid connections and the conversion of existing connections into data-center projects. Shoham follows a similar logic, but the near-term question is sharper: can this site secure the power, planning and customer package needed to turn land into infrastructure.

Nofar Holds The Infrastructure Option, BSR Holds The Monetization Option

In March, BSR presented Shoham as a transaction with expected gross profit of about NIS 31 million for its share and a 700% return on equity. Those figures explain why the extension matters for BSR. Even if Shoham is not its core project, it could add a one-off profit and strengthen the equity story if the deal is signed.

Still, BSR's number depends on an event that has not happened. As long as there is no binding agreement, the expected gross profit is a business target rather than a result. That matters because BSR is built around large real-estate projects, multiple partnerships and monetization events that move equity. In Shoham, value could arrive faster than in a full real-estate development project, but it still depends on the buyer and on conditions BSR does not control by itself.

For Nofar, the story is reversed. The company does not only need to prove it can buy land. It needs to show that its data-center entry uses its real advantages: sourcing land, advancing planning, understanding power connections and accessing project finance. The extension proves none of that. It only gives Nofar more time to see whether those pieces can be built around Shoham.

Shoham Still Has No Financing Picture

The financing gap stands out precisely because Nofar has shown elsewhere that it can close deals and financing. The company describes broad project-finance activity, the Pinegate acquisition, a Sunprime financing agreement and Series E bonds. But Shoham is not yet part of that financed set. Shoham still has no disclosed project CAPEX, debt structure, expected project return, lease or services agreement, or timetable to operation.

That means there is still no all-in cash picture for Shoham. There is an initial land price of about NIS 181 million for 51% of the rights, and a possible mechanism to buy the remaining rights. The numbers that would determine the project economics are still absent: construction cost, power-connection cost, equity requirement, leverage, customer pricing and time to income generation. Without those, investors cannot decide whether this is genuine value creation or only a more expensive option.

The Next Filing Has To Move From Exclusivity To Terms

The next stage depends on three possible disclosures. The first is a binding purchase agreement, including final price, conditions precedent, timetable and the PUT and CALL option, meaning the buyer's purchase right, mechanics. The second is power and planning: either grid connection approval, or at least a clear route to power access at a level that can support a data center. The third is a customer or commercial partner, because a project like this cannot rest only on land and intent.

If one of these appears, Shoham moves forward. If not, another no-shop extension would already be a weaker signal. Exclusivity can buy negotiation time, but it cannot fund the project or replace a signed customer.

The Risk Is Confusing Optionality With Execution

The main investor risk is not that the filing is negative. In a narrow sense it is positive: the parties are still talking. The issue is that the market may give the extension more weight than it deserves. A no-shop protects the negotiation. It does not protect the project economics.

The counterargument is worth taking seriously. Another extension after February 3 and March 25 can suggest the negotiation has not stalled and that the parties need more time to finalize documents. That is partly true. But even under that reading, the reasonable conclusion is a somewhat higher probability of continuation, not a change in project status.

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Shoham remains on the table, and that is not meaningless. For BSR, it could become a monetization transaction with meaningful gross profit relative to its partnership exposure. For Nofar, it could become an Israeli entry into data centers that connects to its energy capabilities. For now, though, the April 23 update keeps the value in option form. The filing that changes the picture will not be another exclusivity extension. It will be a binding agreement with power, a customer and financing.