While the deals for branch sales by Nahum Bitan's Yenot Bitan are held up, and the supermarket chain is having to wait for approval by the Competition Authority and to obtain agreement from the landlords from which it leases the sites, retail industry sources say that Moti Ben-Moshe may be eyeing the Mega chain, part of the Yenot Bitan group since 2016.
According to the sources, Ben-Moshe has recently held meetings with the aim of examining the possibility of buying the Mega chain, which was formerly owned by Alon Group before the latter collapsed. Ben-Moshe has a chain of neighborhood grocery stores, AM:PM, and the Mega chain could represent a step up for it. Ben-Moshe took over Alon Group after its debt settlement and thereby acquired the AM:PM chain.
Blue Square Real Estate, a 57%-owned subsidiary of Blue Square, which is controlled by Ben-Moshe, leases to Yenot Bitan about 60 of the properties on which the Mega brand operates, out of a total of nearly ninety Mega branches. Ben-Moshe holds Alon Blue Square through Extra Holdings Israel, of which he owns 100%.
According to Blue Square Real Estate's second quarter financials, Mega accounts for 26% of its revenue. Blue Square Real Estate also leases branches to competitors of Mega. Altogether, it is the landlord of some 90 supermarkets, with an aggregate area of 140,000 square meters. Twenty of them are in Tel Aviv.
In the past few months, Nahum Bitan has signed two deals for the sale of twelve branches to competitors, Victory and Freshmarket. Five of them are branches originally belonging to Mega that are supposed to net Yenot Bitan NIS 163 million. According to sources familiar with the matter, Ben-Moshe's aim is to acquire the chain, and that is one of the reasons that he has vetoed the sale of the branches that he leases to the Yenot Bitan group.
According to the sources, Ben-Moshe and Bitan have recently met twice in order to reach understandings over Ben-Moshe's refusal to sign lease agreements. Nevertheless, sources close to Bitan say that there is no contractual obstacle to transferring the branches that are the subject of the two deals already signed, and claim that only one of the branches involved belongs to Blue Square Real Estate.
Yenot Bitan said in response to the report: "The deals for the sale of Yenot Bitan group branches to the Victory and Freshmarket chains remain in force, and the parties are only waiting for approval from the Competition Authority."
Published by Globes, Israel business news - en.globes.co.il - on November 11, 2019
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