Sources inform “Globes” that as part of the deal to acquire IKEA Israel at a company value of NIS 140 million, Matthew Bronfman is negotiating with IKEA to get its franchise for the Palestinian Authority as well. The sources added that the idea is to open two more stores at three sites IKEA is examining: in the Krayot north of Haifa, Jerusalem, and south of Yavne.
The change in ownership of IKEA Israel means that its former general manager, Gil Unger, will return to the company. This means that plans for IKEA Israel, long-delayed by the uncertainty in its ownership, can no go ahead. The IKEA Israel management committee, headed by Adv. Lipa Meir, has for along time been unable to devise an agreed mechanism for the sale of the store, blocking development.
It is now likely that plans prepared by Unger when he managed IKEA Israel, before he became CEO of Blue Square Israel (NYSE: BSI; TASE: BSI), will now go ahead. The most important plan is to open two more stores, which, as far as is known, will be opened at the same time in order to achieve economies of scale, and greatly boost activities quickly.
Co-Op Blue Square Consumer Cooperative Society (Co-Op) is displeased by the sudden sale of IKEA Israel without a tender. Co-Op is worried that it will not maximize its proceeds from this sale, since there are no other bids. The IKEA Israel management committee is convening tonight to decide what to do.
Blue Square's board of directors will meet on Sunday to discuss bones of contention, including a branch development plan, and advertising. Behind the scenes is Bronfman-Fisher Investments' request that Alon Dor Group to buy its stake in Bronfman-Alon Ltd. (Blue Square's controlling shareholder) at a company value of $480 million for Blue Square. Alon Dor CEO David (Dudi) Wiessman has rejected the request, sticking to his strategy of neither buying or selling. Wiessman has made no counter-offer to Bronfman. Since there is no mechanism for separating the companies, the situation is deadlocked.
Published by Globes [online], Israel business news - www.globes.co.il - on March 3, 2005