Angel Bakery (Salomon A. Angel Ltd. (TASE: ANGL)), has sold the site of its Jerusalem bakery to More Provident Funds and other partners for NIS 400 million. Angel, which produces and markets breads and markets cakes, estimates that as a result of the deal it will post a pre-tax capital gain of NIS 335 million, which is almost 60% more than the company's market cap before the sale.
Angel also estimates that its tax liability on the sale will be NIS 70 million after offsetting losses. Angel's share price rose by more than 50% after it notified the stock exchange of the sale, bringing its market cap to NIS 330 million.
Angel's bakery stands on nineteen dunams (4.75 acres) in the Givat Shaul industrial zone close to the light rail line and the new entrance into Jerusalem. The buyers intend to promote a zoning change under the Jerusalem master plan from an industrial zone to a residential, commercial and office zone. Angel says that it is drawing up plans to transfer the bakery's activity to other sites, mainly in Lod and Netivot.
More Provident Funds share in the deal is 20%. Construction on the site is expected to begin in 2024, at which time the buyers will decide whether to bring in more partners.
Angel is controlled by Stybel Ltd. - Flour Mills, which holds 24% of the shares, and the Angel family, headed by the company's CEO Yaron Angel, who holds 23%. The company's business has been declining for a long period, chiefly, according to the company, because of the decline in the controlled price of bread.
Angel's losses in the past five years (2016-2020) amount to nearly NIS 30 million, and its revenue over the period decline by more than 15%, from nearly NIS 500 million in 2016 to NIS 415 million in 2020.
The recently released financials for the first half of 2021 indicate that the decline continues. While revenue was stable at NIS 205 million, the company's loss grew by almost 50% to NIS 4.5 million.
Before the rise prompted by the current deal, Angel's share price had dropped 33% since March 2020.
Published by Globes, Israel business news - en.globes.co.il - on August 26, 2021
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