Clubmarket Marketing Chains Ltd. trustees Adv. Shlomo Ness and Gabi Trablissi CPA today distributed a document comparing the bids for the retail chain, in order to prove that Super-Sol Ltd. (TASE:SAE; OTCBB:SSLTF) had clearly made the best offer. The trustees will submit the bids for court approval and a decision by Antitrust Authority director general Dror Strum.
Super-Sol offered to buy either all of Clubmarket’s shares for NIS 825.5 million, or the retail chain’s activity for NIS 790 million. Both options involve acquiring inventory at its value on the date of transfer.
As Clubmarket’s employees claim, Super-Sol is prepared to hire them as new employees, without seniority, under Clubmarket’s existing labor contract. Super-Sol is also demanding that all of Clubmarket’s leases for its stores remain in force and unchanged. The only subject that the trustees are questioning is the absence of a clause concerning the problem of Clubmarket’s coupons.
The Elkayam-Sheetrit consortium is prepared to buy Clubmarket for a token amount, and inject a NIS 100 million owners loan. The banks would get 20% of Clubmarket’s shares, and Clubmarket would issue NIS 250 million in nine-year bonds, starting two years after the transfer of ownership.
The Elkayam-Sheetrit consortium did not append a bank guarantee, claiming a lack of time; the consortium’s attorney promised to obtain the guarantee within 72 hours. Clubmarket’s trustees did not say whether a guarantee had been submitted.
The Elkayam-Sheetrit consortium offers to hire Clubmarket’s employees as new workers, while preserving their annual vacation and health rights on the basis of seniority. Up to NIS 20 million of the bond issue is designated for paying increased compensation to employees who will be laid off. The consortium insists that Clubmarket’s trustees fire redundant employees and sell off unneeded assets within four months.
Since the Elkayam-Sheetrit consortium is a Franco-American consortium, it has asked to be allowed to withdraw from a deal if there is “a substantial deterioration in Israel’s economic and/or political circumstances in the period from the date of the offer until the date the deal is completed.”
Rami Levy Hashikma Marketing Ltd. owner Rami Levy said he would bring into his consortium Rekah Pharmaceutical Industry Ltd. (TASE:REKA) and real estate tycoon Ilan Rejwan in equal shares. Levy offered only to buy Clubmarket’s shares, and inject NIS 90 million in working capital into the company.
Rami Levy offered to repay only NIS 120 million of Clubmarket’s debts, by attaching 1% of turnover over 72 months. Proceeds from inventory would pay the trustees’ salaries and Clubmarket’s debts to small suppliers. Banks and other creditors would receive 40% of Clubmarket’s shares.
Rami Levy predicts that Clubmarket will be profitable in the first year, and that it can distribute a dividend to its creditors. He proposes paying 1% of turnover from the first year, and 2% after six years.
Clubmarket’s trustees said Kega Trust’s offer was unclear, and it had the right to withdraw it for any reason. Kega Trust did not append a bank guarantee or documents proving its wherewithal, as required. It did not even submit a framework for an acquisition. It predicts NIS 300 million in royalties a year over ten years, in addition to an immediate paymentof 10-15% above the highest bid, of which 10-15% will be in cash.
Under some of the bids, Clubmarket’s creditors will see very little money for a very long time.
Published by Globes [online], Israel business news - www.globes.co.il - on August 22, 2005