Rami Levy has sold a second bloc of shares in his supermarket company Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) within three months, selling 128,797 shares at NIS 167.43 per share to FMR LLC (Fidelity Investments) for a total of NIS 20 million, in an off-floor deal. FMR became a party at interest in Rami Levy in April, when it reached a 5% holding, worth NIS 100 million. The new purchase boosts its stake to 6.8%.
Foreign investors are interested in Rami Levy. FMR's purchase of shares followed the purchase of 4.8% of the supermarket chain by Michael Dell's MSD Capital LP at NIS 137 per share for a total of NIS 90 million.
Rami Levy and his wife, Adina, have sold 20% of Rami Levy Chain Stores to investment institutions since it went public in June 2007 for a total of NIS 280 million. The company has also distributed NIS 420 million in dividends over this period, of which Rami and Adina Levy have been the main beneficiaries.
The latest sale of shares to FMR reduces Rami and Adina Levy stake in the company to 51%, worth almost NIS 1.2 billion. The sale comes after a 35% rise in Rami Levy Chain Stores' share price since the beginning of the year, and a 60% gain over the past 12 months. With a current market cap of NIS 2.3 billion, Rami Levy is only 16% shy of the NSI 2.8 billion market cap of Israel's largest supermarket chain, Shufersal Ltd. (TASE:SAE), which is controlled by Nochi Dankner through IDB Holding Corp. Ltd. (TASE:IDBH).
Excellence analyst Liat Glazer said today, "It is necessary to look at the value of the business itself, and remember that Shufersal has a NIS 2 billion debt while Rami Levy has a cash surplus. Another difference in the pricing is seen in the multiples: Shufersal has a multiple of 7.5 and Rami Levy has a multiple of almost 12. Whereas the growth ability of Shufersal, as the market leader, is limited, Rami Levy should have high growth rates in the coming years, which the market has priced in the higher multiple." She adds, "At the current price levels, both companies are more or less at our target prices, and both have "Market perform" recommendations."
Published by Globes [online], Israel business news - www.globes-online.com - on June 27, 2013
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