The Mahsanei Hashuk chain is buying three branches from the Mega chain for NIS 20-25 million, and Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) has offered NIS 50 million for 6-7 more branches, sources inform "Globes."
The management of Mega, headed by CEO Raviv Brookmayer, is trying to maximize its proceeds from the sale of 32 branches it is planning to close down, and is giving preference to the multiple branches to competing chains.
Mega has received a large number of queries from marketing chains, which have expressed interest in buying most of the branches. Sources said that some of them began negotiations with Mega, but subsequently lost interest.
A source at Mega told "Globes" that the branches were being sold at especially low prices, due to the chain's wish to conclude the deals within a short a time as possible. He said, "Everyone who buys a branch from us sell 3-4 times our turnover, but they'll also eventually come to a halt. I don't believe that they can go wild like this, because they'll eventually take market share from each other - there's a limit in these things."
Mahsanei Hashuk will pay Mega NIS 10 million for the You branch in Beer Sheva, beating out Rami Levy Chain Stores , which offered less for the branch. Mahsanei Hashuk will pay the rest of the total for the branches in Ashdod and Pisgat Zeev in Jerusalem.
Rami Levy Chain Stores controlling shareholder Rami Levy is negotiating for seven You branches: the Castra branch in Haifa, Arad, Hadera, Yokneam, Netzer, Bnei Brak, and Petah Tikva (the Segula branch), and has offered NIS 50 million for them.
The May Market and King Store chains are interested in Mega's branches in Acre, Carmiel, and Nazareth. The May Market chain offered NIS 25 million for three branches, while the King Store offered NIS 6 million for each branch. A source in the chain, however, said that there negotiations were not making progress.
A source in the chain said that the Shuk Ha'ir chain, controlled by Amikam Ben-Zvi, was still interested in the You branches, although Ben-Zvi professed to be no longer interested. Ben-Zvi previously bought eight branches from Mega, and used them to launch the Shuk Ha'ir chain. Documents submitted to the court by Mega show that the Shuk Ha'ir chain has paid Mega only for the equipment in those branches, not for the business in them.
The agreement between the parties also included a trade clause, in which Shuk Ha'ir would buy its merchandise through Mega's trade agreement. This clause in the agreement is currently the subject of a legal dispute, after Shuk Ha'ir sued Mega, claiming that it had paid Mega for merchandise, but Mega had not paid the money to the suppliers.
Published by Globes [online], Israel business news - www.globes-online.com - on July 19, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015