Sources inform "Globes" that the Israel Competition Authority (formerly the Israel Antitrust Authority) is only requiring Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) to sell nine branches of Coop: five branches in the Jerusalem area and four elsewhere, in order to obtain approval for the acquisition of Coop. Levy was originally required to sell 20% of the branches.
The sources added that the supermarkets involved are in Maale Adumim, Efrat, Jerusalem branches in East Talpiot (Armon Hanatziv), Palmach Street, French Hill, Givat Oranim and Beit Hakerem, and two branches in Rishon Lezion. These branches are probably the chain's best in Jerusalem; if Rami Levy eventually acquires the chain with the exception of these branches, they will be offered for sale separately to other bidders.
Even if Levy solves the antitrust problem, however, one major obstacle still remains before the deal is completed and court approval is obtained: the Coop workers' committee. As far as is known, Rami Levy's representatives have held two meetings to date with the workers' committee, but no agreement with the Histadrut (General Federation of Labor in Israel) has been signed. The workers' committee is also negotiating with the Zol Ubegadol chain, which made the best offer for a collective labor agreement, but no agreement has been signed.
It is believed however, that the workers' committee prefers a buyer like Machsaney Hashuk or Victory Supermarket Chain Ltd. (TASE:VCTR) that can acquire the entire chain without having to sell branches, which will leave some of the workers without guaranteed conditions. As of now, the workers' committee has held no talks whatsoever with Victory, while talks with Machsaney Hashuk have reached a fairly advanced stage. An informed source said that the workers' committee and Machsaney Hashuk were likely to sign a letter of agreement tomorrow, which will make the latter's bid preferable to the workers because it would maintain the Coop chain as a complete whole without any branches being sold separately.
A NIS 30 million gap
The scheduled Jerusalem District Court hearing was postponed until Sunday at the request of the Coop trustees in order to enable the workers' committee to reach agreement with the trustees on a recommendation of one buyer. While the workers' committee will probably prefer a bid that preserves the Coop chain's as a single entity, the trustees' agreement on the amount of the bid is also required.
The difference between Rami Levy's bid and that of Machsaney Hashuk is NIS 30 million. The workers' committee and Machsaney Hashuk hope to reach agreement on a collective agreement under Histadrut auspices by Sunday.
Five acquisition bids for Coop
Coop has been operating under a stay of proceedings in recent months, with debts amounting to NIS 200 million. The trustees for the chain, Adv. Shlomo Nass and CPA Chen Berdichev, have been conducting talks for sale of the chain for several weeks, in which five different bids to acquire it were submitted in the final auction. The trustees allowed the bidder to omit up to three branches of the chain from their bids.
The highest bid was NIS 163 million in cash by Rami Levy for the entire chain. The second highest bid, NIS 136 million, was by Zol Ubegadol, controlled by Avikam Yochanan. Bids were submitted for which the Competition Authority does not require any branches to be sold by Machsaney Hashuk, Victory, and Freshmarket, but the latter has retracted its bid.
Published by Globes, Israel business news - en.globes.co.il - on February 13, 2019
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