Sources inform “Globes” that IKEA has agreed to sell IKEA Israel to Matthew Bronfman, without the customary tender. The price of the deal has not yet been closed, but is reportedly about NIS 140 million, much higher than originally estimated.
Bronfman has already met IKEA Swedish representatives. He beat the other contenders for the franchise, including Alon Israel Fuel CEO David Wiessman, Bronfman's partner in Blue Square Israel (NYSE: BSI; TASE: BSI), who has become a business rival.
Sources also inform “Globes” that Fox-Wizel (TASE: FOX) chairman Harel Wiezel and Africa-Israel Investments (TASE: AFIL), controlled by Lev Leviev, were also interested in IKEA Israel. Fox and Africa-Israel jointly acquired the Zara franchise in Israel, and Leviev recently acquired 10% of Fox.
Fox was unavailable for comment, and an Africa-Israel spokesman denied the report.
IKEA would not allow potential buyers to assess IKEA Israel's value by opening the company's accounts. IKEA offered to have Shlomo Zohar CPA to present a value for the franchise on the basis of his evaluation, without opening the company's accounts.
After a two-year delay, the sale of IKEA Israel got underway a month ago. IKEA had planned to publish a tender for the franchise, but apparently will not do so now.
IKEA Israel is owned by Co-Op Blue Square Consumer Cooperative Society (Co-Op) and the heirs of the late Albert Gnat, a Canadian businessman who died without leaving instructions about what to do with the holding. As a result of a deadlock between the management committee and IKEA over the sale of the activities of IKEA Israel, it was decided that the courts would recommend a buyer, and a court proceeding would approve the franchisee. Since at this stage no situation has arisen whereby IKEA can approve a franchisee in advance, the candidate recommended by the court will be submitted for final approval, after a procedure led by the supervisory council, headed by Adv. Lipa Meir.
It seemed that a decision had been taken for a mechanism to select offers, only after which a buyer would be submitted to IKEA for approval. However, it now appears a deal in principle has been closed with Bronfman without other candidates being allowed to submit bids.
Meanwhile, Gad Zeevi Galaxo Group receiver Lipa Meir is handling the sale of ACE Marketing Chains (ACE Israel). The most recent valuation for ACE Israel was about $20 million. The chain, with 37 ACE and Office Depot stores, is expected to have over NIS 550 million in sales this year.
Published by Globes [online], Israel business news - www.globes.co.il - on March 2, 2005