It seemed two weeks ago that Bilu was finally assured of control of Home Center, owned by Malibu and Kittel-Nechushtan. Bilu signed an agreement with Blue Square under which the latter would sell it 8.8% f Home Center’s share capital, which was meant to bring Bilu to a 52% holding in the shares of the retail chain, i.e., it would achieve control of the chain.
But, under the surface, things were more complicated, and the agreement between Bilu and Blue Square became delayed. Bilu therefore decided to assure itself control of Home Center at any price, and yesterday it stormed Wall Street trading in the company’s shares and bought a large share bloc, representing 7.5% of Home Center’s share capital, for $8 million.
Dealing in Home Center shares on this scale is quite exceptional, and so, to obtain the merchandise, Bilu was compelled to buy the shares at a 50% premium, at prices of $15-22 per share. For the sake of comparison, we should recall that, in the deal with Blue Square, Bilu was to buy the shares at$17 per share.
After yesterday’s purchase, Bilu reached a 46.1% holding in Home Center. Together with options on 5% of the company’s shares owned by Home Center chairman Levy Kushner, it now holds 51% of the company’s capital, enough for it to control the chain.
Home Center has expanded significantly in recent years, and become an extremely profitable chain, while its main competitor, Ace Buy and Build, is finding it hard to reproduce its financial achievements. Home Center ended 1997 with revenue of NIS 457 million, and its profits rose to NIS 11.5 million.
Published by Israel's Business Arena on April 28, 1998