In the past few weeks, Hamashbir 365 Holdings Ltd. (TASE:MSAH) controlling shareholder Rami Shavit has been busy trying to change the company's structure through a merger of subsidiary Club 365 with Hamashbir. While this move has faced difficulties, an interesting business opportunity has been created - the purchase of the shares of his partner, Dr. Yaakov Gitarts, in the company through which he and Shavit control Hamashbir.
In a notice to the TASE on Sunday, Hamashbir announced that Gitarts, through his company Newbold Israel Ltd., has decided to sell his stake in Shavit-Gitarts Group Ltd., which owns 82.5% of Hamashbir, to Eli Toledano, a former supplier to the department store, for $43 million (NIS 150 million), pursuant to the agreement they signed in August 2013. The sale means that Gitarts has changed his mind from a month ago, when he claimed that there was a serious dispute with Toledano over the latter's decision to exercise his option to buy the shares.
Shavit has the right of first refusal to buy Gitarts's shares in their partnership.
The August agreement between Gitarts and Toledano was signed four days before Hamashbir announced that it was in talks to bring in a partner to the business, which sent its share price up 50% and made the purchase of Gitarts's shares much more worthwhile. Hamashbir said that it was in talks with US private equity fund NashOne Inc., controlled by brothers Scott Korman and Ari Korman, to invest NIS 143 million into the company: NIS 77 million in Hamashbir Department Stores Ltd. and NIS 57 million directly in Hamashbir 365 for a 29% stake in Hamashbir Department Stores. Since that announcement, Hamashbir's share price has risen 290% to a current market cap of NIS 500 million.
In early January, Hamashbir announced that the closing of the NashOne deal was postponed to March 17, 10 days after the deadline Shavit must pay Gitarts for his share in Shavit-Gitarts if Shavit decides to exercise his right of first refusal.
Shavit said, "I am reviewing my next steps with regard to Newbold's announcement."
Published by Globes [online], Israel business news - www.globes-online.com - on January 20, 2014
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