Tel Aviv District Court president Judge Uri Goren postponed the choice of a purchaser for the Hamashbir Lazarchan retain chain to Monday. Two bids were submitted to the court: one by Sakal chairman and CEO Solly Sakal, and one by Shiryonit Hosem Security Products Manufacturing chairman Rami Shavit.
The Co-Op Blue Square Consumer Cooperative Society (Co-Op) appointed committee, the trustee for the Hamashbir Lazarchan arrangement, is recommending that Shavit’s bid be accepted.
Both bids are similar in principle. Both involve the transfer of the chain’s activity to a new group to be founded by the purchasers. The main difference concerns the employees. The Shavit group plans to sign a collective work agreement with the remaining employees, after closing some of the stores, while the Sakal group wants the remaining employees to accept the same terms as the Sakal group employees, most of whom have personal contracts linked to sales in the stores.
The employees also support the Shavit bid. As of this morning, the creditor banks, shareholders, and various concerns present in court, including purchasing agents and owners of shopping malls with Hamashbir Lazarchan stores, had not received the bids, and were therefore unable to make a detailed response.
The court ordered a short adjournment, at the request of the Sakal group, which wanted to continue its discussions. The main issue raised in court, which also concerned the Co-Op shareholders, was the court’s request to the groups to capitalize their future obligations, pay some money in advance, and not withdraw any future proceeds for 7-10 years, as proposed.
The judge said he would not accept a seven-year arrangement, and therefore found the two bids submitted unsatisfactory. He asked that at least partial capitalization be considered, for a reasonable one-year period. He also tried to encourage Sakal and Shavit to submit a common bid.
Published by Globes [online] - www.globes.co.il - on February 12, 2003