Israel Coop trustees want quick sale

Rami Levy Photo: Eyal Yitzhar
Rami Levy Photo: Eyal Yitzhar

The main bidders are the Rami Levy and Zol Ve Begadol supermarket chains.

Sources inform "Globes" that the Israel Antitrust Authority is thwarting the plan by the trustees for the Coop supermarket chain to sell the company quickly by extending the stay of proceedings for the retail chain, and that the likely result will be a substantial delay in the sale of the supermarket chain. The trustees responded with a petition to the Jerusalem District Court for an urgent hearing, which the Israel Antitrust Authority director general will be required to attend.

The trustees met yesterday with senior representatives from the Israel Antitrust Authority in an attempt to pressure them to decide whether the chain's branches could be sold to Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) or Zol Ve Begadol, the two leading candidates to acquire Coop, or whether the fact that a large proportion of Coop's branches (15 of them), including the most profitable of them, were located in Jerusalem, where Rami Levy and Zol Ve Begadol are already dominant players, would prevent this. The Israel Antitrust Authority made it clear at the meeting with the trustees that a comprehensive examination of this question would take one-to-two months. This answer creates great difficulty for the trustees, who were convinced that they would be able to announce the winner last week, thereby giving the buyer time to prepare for the Passover holiday. It now appears, however, that the timetable on which the trustees were counting will be significantly lengthened, and the financing approved for operating the chain during the stay of proceedings will not be enough for such a lengthy period.

Judging by the recent mergers discussed by the Antitrust Authority, however, it is likely that one or two months is a relatively short time period. The Antitrust Authority took four months before approving the merger between Shufersal Ltd. (TASE:SAE) and New Pharm, and required six months to decide on the merger between Mizrahi Tefahot Bank (TASE:MZTF) and Union Bank of Israel (TASE: UNON).

The petition by the trustees for an urgent court hearing in order to expedite the Antitrust Authority's decision was filed because "to the trustees' amazement, the Antitrust Authority's view, as communicated at yesterday's meeting, was that the Antitrust Authority would require at least two months to examine the bidder and form an initial opinion about the acquisition of the chain's activity."

The trustees also mention the possibility that the Antitrust Authority will not approve the bids submitted, meaning that the auction will be reopened. Their letter concludes by attributing responsibility for the future of the creditors and the employees to the Antitrust Authority: "If the Antitrust Authority does not give an answer within a short time, the trustees will be unable to continue operating the company in its present state, and the main damage will be suffered by the company's creditors and 1,000 employees."

Other bidders for Coop include Victory Supermarket Chain (TASE: VCTR), managed and controlled by CEO Eyal Ravid; the Fresh Market chain, controlled by the Amir brothers; and the Machsaney Hashuk chain, controlled by the Naaman and Cohen families.

In response to a query from "Globes," the Antitrust Authority said, "We do not comment on mergers that we are examining."

Published by Globes, Israel business news - en.globes.co.il - on January 15, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Rami Levy Photo: Eyal Yitzhar
Rami Levy Photo: Eyal Yitzhar
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