The Gaon-Zbeda group will exercise its first refusal rights, thereby acquiring control of ACE Marketing Chains (ACE Israel), a chain of do-it-yourself stores. The group today matched the bid submitted by Markstone Capital Partners Fund, and will acquire 75% of the company for $20 million, reflecting a value of $29 million for the chain.
Following the deal, Benjamin D (Benny) Gaon and Shlomo Zbeda, who already owned 25% of ACE Israel, will own all of it in equal shares.
Businessman Gad Zeevi previously controlled ACE Israel. As result of his debt to First International Bank of Israel (TASE: FTIN1;FTIN5), however, a court appointed Adv. Lipa Meir receiver for the group of companies controlled by Zeevi. Meir decided to sell ACE Israel.
In the tender conducted by Meir, Zeevi offered to purchase his share for $20.25 million, $250,000 more than Markstone’s bid. Zeevi’s bid was disqualified last week, after he failed to provide guarantees amounting to 10% of his bid, and insisted on receiving another 30 days to conduct due diligence.
Zeevi’s disqualification left Markstone, managed by Amir Kess and Ron Lubash, alone in the tender. Markstone has already invested in Israel in Yellow Pages (Dapey Zahav). Meir negotiated with Markstone in order to obtain a better offer. He failed in this task, but Markstone was nevertheless declared the winner of the tender. Zbeda is now exercising his first refusal rights by matching Markstone’s bid.
It is possible that Antitrust Authority director general Dror Strum will pose conditions for Zbeda’s acquisition of ACE, because ACE supplies 30% of the products sold by the Auto Depot chain, and over 50% of the auto accessories. Auto Depot is being merged with ACE.
Published by Globes [online] - www.globes.co.il - on August 22, 2005