24 years after founding Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI), chairman Rami Levy has made his first large share sale, and at a good price despite the difficult market conditions. He sold 10% of his eponymous company, Israel's fourth largest supermarket chain, to Psagot Investment House Ltd. at NIS 43.70 per share, for a total of NIS 51 million. Psagot distributed the shares to other institutional investors.
The agreement between Rami Levy and Psagot stipulates that if he wants to sell more shares to institutional investors over the next six months, he will do so through Psagot, unless Rami Levy Chain Stores' share rises above a certain threshold, which was not disclosed.
The sale will make Rami Levy Chain Stores eligible for inclusion in the Tel Aviv 100 Index. Levy told "Globes", "I did this in order to enter the Tel Aviv 100 Index. I think that my company should be included in the index."
Rami Levy Chain Stores' market cap is NIS 547 million, higher than the bottom 16 companies currently on the index. However, the company has been ineligible for inclusion in the index because the public's holding in it was 15.8%, less than the 20% threshold condition for inclusion. The sale boosts the public's holding in the company to 25.8%, eliminating this problem, and the company will probably be included in the index at the upcoming update at the end of June.
Rami Levy Chain Stores' inclusion in the Tel Aviv 100 Index could further boost its share price because of demand by exchange traded funds, which will have to buy the share ahead of the index update. The share rose 4.3% today to NIS 46.60.
Published by Globes [online], Israel business news - www.globes-online.com - on May 6, 2009
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