Eighteen months after becoming a party at interest in Super Sol, US investment bank Morgan Stanley yesterday announced it had sold 1.7% of the chain’s shares in an off-floor deal. Super Sol claims that, to the best of its knowledge, the sales were made over a period of several months, starting at the beginning of August this year.
Last week, Super Sol’s shares plummeted some 20%, and their price this morning was NIS 9. The sale was presumably made at higher per share prices. The average price of the share since August has been NIS 11, which means Morgan Stanley’s sale proceeds amount to about NIS 40 million. Incidentally, this price is similar to the price at which Super Sol shares were trading when Morgan Stanley became a party at interest.
Morgan Stanley’s Israeli representative, Yair Sarusi, said today he believed the sales were carried out by the emerging market investment funds managed by Morgan Stanley because of the large losses sustained recently. Last year, Morgan Stanley’s investments on the Tel Aviv Stock Exchange amounted to $200 million. Sarusi estimates that the total is now significantly lower.
Morgan Stanley announced in April 1997 that it had become a party at interest in Super Sol, and until recently held 7.64% of the shares in the chain. Following the sale, the investment bank’s holdings have fallen to 5.97%. Another large sale of Super Sol shares was reported recently - by Bank Leumi’s mutual funds - for NIS 6 million.
The largest shareholders in the chain are currently the IDB Development sister companies Discount Investments (22.32%) and PEC (17.55%). The Bank Leumi provident funds hold another 7.03% of Super Sol’s shares.
The poor results Super Sol published last week are still making waves on the capital market. The Central Securities Company today published a Sell recommendation for the chain’s shares. The broker firm estimates the real value of Super Sol shares at NIS 8.8, 3% lower than this morning’s price. The economic value deriving from the recommendation is NIS 1.84 billion for the entire chain.
Published by Israel's Business Arena on November 11, 1998