CVC pulls out of talks to buy 40% Super-Pharm stake

SuperPharm Photo: PR

The parties could not agree about CVC's involvement in managing Super-Pharm.

The sale of 40% of the shares in Super-Pharm to the CVC fund will not go through, sources inform "Globes." Private equity fund CVC, which manages $52 million in assets, conducted advanced negotiations in recent days for the purchase of a 40% Super-Pharm stake at a value of NIS 1.9 billion for the chain.

Super-Pharm, which negotiated with the fund, failed to reach agreement about management of the partnership. CVC demanded substantial involvement in Super-Pharm's management, but Super-Pharm owner Leon Koffler opposed this. The chain is not currently negotiating with any other party. The banks, which wanted to sell their share in the chain, will have to give up on the idea for now. At the same time, it cannot be ruled out that the parties will resume their talks. A market source said that the deal had not been completely taken off the table.

The 40% stake on which negotiations were conducted was composed of 15% owned by Koffler, 15% owned by Bank Leumi (TASE: LUMI), and 10% owned by Israel Discount Bank (TASE: DSCT). CVC only last week reported that it had acquired the women's health division of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) for $703 million.

The purpose of the sale was to expand Super-Pharm's overseas activity with an international concern, because the chain has reached the limits of its growth potential in the domestic market, while the global potential for Super-Pharm is much greater. Super-Pharm's aim was to find a fund that would recognize the potential for value enhancement and would have the ability to realize it overseas by helping Super-Pharm complete with major corporations and cope with different regulations in the countries in which it operates.

Super-Pharm's activity is considered unique in the world, because it combines a pharmacy, a cosmetics department, and a general department, compared with chains specializing in specific areas. The company was looking for a large concern to support this combination. It appears that CVC, which holds chains in the sector in China and Poland, among other things, is likely to fulfill this need exactly, but it was learned today that the deal would not go through.

Published by Globes [online], Israel Business News - www.globes-online.com - on September 28, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

SuperPharm Photo: PR
SuperPharm Photo: PR
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