Co-Op Secretariat Chairman Benny Gaon continues to look for an investor who will buy the controlling interest in the cooperative society, and join as a partner into the new company set up on the basis of Co-Op Blue Square Consumers' Cooperative Society, following the implementation of the Winograd Committee.
The investor will join the company before it is listed on the stock exchange, and the agreement with him will include a right of first refusal for future acquisition of all negotiable shares Cooperative Society members wish to sell.
Opposition members within the management of the Society are opposed to Gaon's plan. In their view, the entry of an investor, apparently a foreign one, will be done on terms similar to the Arison group's entry into Housing & Construction (Shikun u'Binui), and Gaon and other managers will receive benefits and long-term contracts. It should be noted that an internal Histadrut Labor Federation committee is currently reviewing the Housing & Construction deal.
The Cooperative Society's management says that Gaon continues to push the investor issue, but the entry of an investor will not constitute a condition or a factor liable to hold up the implementation of the Winograd Committee's recommendations, submitted yesterday, and the change in the Society's legal structure.
Following numerous arguments between Committee members and the Cooperative Society's managers, who insisted that a controlling interest be created before the company is listed on the stock exchange, the Committee refused to recommend the entry of a strategic or financial investor.
The Cooperative Society's negotiations with the income tax authorities are expected to be completed soon.
If all the Winograd Committee's recommendations are implemented, a struggle over ownership of the company is expected to break out. According to existing records, the Cooperative Society has 18,500 full members. 2,300 members died over the years, and no decision has been taken as to their heirs. The Winograd Committee did not address the inheritance issue, which is liable to lead to protracted lawsuits.
The Cooperative Society has two major holdings: 78% of Blue Square Israel, traded at a low turnover on the New York Stock Exchange, at a company value of $430 million.
This company holds 80% of Blue Square Assets & Investments, traded on the Tel Aviv Stock Exchange at a company value of $494 million.
The Cooperative Society also owns 80% of Hamashbir Lazarchan.
Published by Israel's Business Arena on 23 March, 2000