Nochi Dankner's IDB Group will sell its stake in the supermarket chain to Leo Noe and existing shareholders Bronfman Fisher Group for NIS 2.4 billion.
Nochi Dankner is selling control of supermarket chain Shufersal Ltd. (TASE:SAE). On Wednesday, Dankner signed a memorandum of understanding whereby IDB Holding Corp. Ltd. (TASE:IDBH) will sell 70% of its stake in Shufersal to British businessman Leo Noe, giving him 32%, and the rest, 13.5%, to its existing partner in the control of Shufersal, Bronfman Fisher Group, owned by Matthew Bronfman and Shulem Fisher, which already owns 18.56%. The deal means the two buyers will have equal stakes.
IDB will sell its stake for NIS 2.419 billion, representing a valuation of NIS 5.26 billion for the company. Shufersal has a market cap of NIS 3.573 billion.
The deal was arrived at after lengthy negotiations. Dankner has been in talks with Bronfman Fisher several times in the past over a sale, but each time withdrew at the last moment.
The Bronfman family will probably have to sell its stake in Israel Discount Bank (TASE: DSCT), since, according to the recommendations of the committee on concentration in the economy, which have yet to be legislated, ownership of a bank and of a non-financial asset of the size of Shufersal will be prohibited.
Commenting on the sale, Dankner said, "Shufersal is not just another deal for me. I love Shufersal, and my heart will always be with it and its workers. However, as an investment company with an obligation to its shareholders, we must remember that we have to distinguish between our love for Shufersal and considerations of economic value. As soon as we received a very good business proposal, this consideration obliged us to overcome all others. We will receive a good price from the buyers, and will also assist them with a loan that will ease the purchase for them."
Shufersal is Israel's largest supermarket chain. In the first half of 2011, it had revenue of NIS 5.81 billion, and a net profit of NIS 140 million.
The sale comes in the shadow of the social protests over the summer, which were partly over food prices. On Tuesday, "Globes revealed that, immediately after the current Jewish holiday season, Shufersal will embark on a streamlining program that will include a salary cut for employees and layoffs at the company's headquarters, because of rising price competition, which will hit profitability.
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011
You comment was recieved and soon will be published.
Load more comments