Apax Partners has acquired an 83% controlling interest in Ten Petroleum Company Ltd. (TASE: TNPT.B1), Israel's fifth largest chain of gas stations, from Bank Hapoalim (TASE: POLI) for NIS 137 million, reflecting a NIS 166 million value for the company.
Businessman Eliezer Fishman owned Ten for many years. Following the deterioration of his business situation over the past two years, his controlling interest in the chain passed to Bank Hapoalim, which tried unsuccessfully to sell it. Three and a half months ago, Advocates Pinhas Rubin and Yaron Elhawi from the Gornitzky & Co. law firm were appointed as receivers for Fishman's shares at the request of the creditor banks. Since then, the process of selling the company has been expedited. In addition to Apax, the Sky fund and Shapir Civil and Marine Engineering Ltd. were also mentioned as showing interest in buying the company.
Fishman owned 92% of Ten's shares, all of which were attached in favor of the banks (Adv. Assaf Englard was appointed as the receiver for the 9% of Fishman's shares in Ten held by Union Bank of Israel (TASE: UNON)). Following the receivers' appointment, Excellence Investments Ltd. (TASE: EXCE), a minority shareholder in Ten with a 5% stake through its provident funds, asked to exercise the put option it held from Fishman, who notified Excellence that he would be unable to buy these shares "in view of the ongoing court procedures."
Managed by CEO Eran Vaknin, Ten runs 56 gas stations and 20 convenience stores. It also markets fuel products directly to various commercial and business customers in the transportation, contracting, and industrial sectors, and sells to wholesalers.
The company has been up for sale for a long time, but none of the deals for its sale at a company value of NIS 250 million went through. Parties previously interested in acquiring Ten when it was controlled by Fishman included the Neumann family, which owns Alon Israel Oil Company Ltd., and Eli Elezra through Elezra Holdings Ltd. (TASE:ALZR.B1).
Ten has two bond series totaling NIS 140 million listed on the Tel Aviv Stock Exchange (TASE) and rated BBB plus by S&P Maalot. One of the series is fully repayable on June 30, 2017, while the other, with a 2.6-year duration, has an annual yield to maturity of 2.6%.
Ten's revenue dropped 15.5% to NIS 556 million in the first nine months of 2016 under the influence of plunging oil prices, but the company's gross profit rose 11% to NIS 141 million, supported by the quantity of fuel sold and a reduction in inventory losses. This improvement boosted the company's operating profit during the period by 24.5% to NIS 33 million.
The company is suffering from a prolonged labor dispute. Company employees went on strike at 15% of Ten's gas stations in Israel yesterday and held demonstrations. They called on Ten's management to sign a collective work agreement with them and to improve their employment conditions. The protest measures follow 18 months of negotiations between the employees and management that have failed to produce an agreement ensuring the employees' future and improving their employment terms. The employees are anxious about the coming transfer of control in the company. 550 Ten employees were unionized under Histadrut (General Federation of Labor in Israel) auspices 18 months ago.
Vaknin told "Globes" that the gas stations where the workers went on strike were manned by other workers in Ten. "Unfortunately, this is another in a set of actions taken by the workers' committee at Ten," he said. "Such actions cannot bring about progress in the negotiations currently taking place, at a time when another negotiation meeting has been scheduled for next week. These actions are difficult to understand, because some of the workers' allegations are incorrect. We again call on the workers to return quickly to the negotiating table. On the eve of the transfer of control in the company, such actions are only making things worse."
Published by Globes [online], Israel Business News - www.globes-online.com - on January 10, 2017
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