Shufersal Ltd. (TASE:SAE;Pink Sheets:SSLTF) (formerly Super-Sol) is reaping the rewards of the haredi (ultra-orthodox) boycott of Shefa Shuk, owned by rival Blue Square Israel Ltd. (NYSE: BSI; TASE: BSI). Sources inform ''Globes'' that Shufersal will pay NIS 114 million to buy out its partners in Mazon Kol BI Ltd. which operates the Aleph supermarket chain, which targets the haredi community, NIS 14 million more than the price originally agreed upon in December 2007.
In July, Shufersal exercised its option to buy the 50% stake in Aleph from its partners, and Sol has already transferred NIS 104 million to its Aleph partners, and will reportedly soon pay the balance. The original offer was based on a formula derived from Aleph's profit multiple plus a premium for early redemption.
The payment for Aleph underscores that it was the number one beneficiary of the haredi boycott of Shefa Shuk. The boycott was launched in February and severely hurt Shefa Shuk sales at stores in haredi neighborhoods, as seen in Blue Square's financial report.
After the Aleph acquisition was completed on August 19, Shufersal rebranded its Aleph and Zol Po chains as Yesh.
Published by Globes [online], Israel business news - www.globes-online.com - on September 2, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008