Elco makes highest bid for Globus Max: NIS 144m

Globus Max Photo: Amir Meiri

Six groups took part in the pricing procedure for the movie theater chain.

Globus Max trustees Adv. Alona Baumgarten, Adv. Gil Oren and Boaz Barzilai, CPA today announced that a pricing procedure had been held among the six groups that submitted binding bids for the movie theater chain. At the end of a long procedure conducted by the trustees, two groups reached the final stage: Elco Holdings Ltd. (TASE: ELCO) and Apax Partners, which both made bids of NIS 140 million. Following the continuation of the pricing procedure, the highest bid received was by Elco: NIS 144 million, higher than the initially estimated sum, and substantially higher than the bids submitted before the pricing procedure. The trustees are studying the bid, and will submit their recommendation to the court.

Besides the two finalists, the other groups in the pricing procedure were the Lahav fund, Klirmark Capital, Sky Fund, and Uranus.

After the trustees make their recommendation to the court, Jerusalem District Court Judge Oded Shaham will have to decide who will buy Globus Max.

According to Adv. Hayut Greenberg, who represented the employees in the pricing procedure, representatives of the winning company promised to meet with her in the coming days in order to devise a plan for the continuing the employment of the staff at Globus Max. She said that she had obtained a commitment that at least 70% of the 800 employees would continue working in the new company, and added that this was an excellent result for the workers, thanks to hard work by the trustees.

Globus Max has a NIS 20 million annual operating profit. 75% of the chain is jointly owned by Moshael Straus, chairman of the board of trustees of Yeshiva University in the US, and entertainment industry figure Herbert Seif. Israeli businessman Bennett Kaplan, who was ousted by Straus and Seif, owns the other 25%.

According to a report by the trustees to the Jerusalem District Court, the chain's debts total NIS 330 million, a difference of NIS 230 million from the original amount reported by the company. The trustees said that the difference was due to NIS 100 million in debt claims filed by shareholders and NIS 80 million in damage claims. 176 debt claims have been filed against the company.

Globus Max is one of the three main companies in Israel that builds, manages, and operates movie houses. The company currently operates 11 active movie house complexes. Its two main competitors are Cinema City and Yes Planet. Globus Max is also the exclusive distributor for Israel of three movie studios: Warner Brothers, United Studios and Paramount Pictures. A substantial proportion of Globus Max's profits come from this business.

At the end of the pricing procedure, the trustees said, "An orderly proceeding took place today, at the end of which we had two bids with a very small difference between them. The results of the pricing procedure are a vote of confidence in the company and its employees."

Published by Globes [online], Israel Business News - www.globes-online.com - on September 7, 2017

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

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Globus Max Photo: Amir Meiri
Globus Max Photo: Amir Meiri
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