The Fidelity Funds group (FMR) is still reducing its exposure to Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI). The chain yesterday announced that Fidelity had sold shares for NIS 31 million in on and off-floor deals. Fidelity sold a total of 1.5% of Rami Levy's share capital at NIS 155 a share, 1.5% lower than the market price, leaving it with a 6% stake in the supermarket chain, currently worth NIS 120 million.
Fidelity sold a similar number of shares in recent months in several deals at NIS 148 per share.
Following the Rami Levy cash-in
The new sale followings the sale of 3.5% of Rami Levy's share capital by Rami Levy, the controlling shareholder in the chain, to investment institutions for NIS 72 million at NIS 154 a share. This sale, which took place ahead of the changes in the Tel Aviv Stock Exchange (TASE) indices, was aimed at increasing the public's holdings in the chain, thereby increasing its weight on the Tel Aviv 90 Index. Levy currently owns 45% of the shares in the chain, with a market value of NIS 950 million. Fidelity's sale follows a 10% rise in the share price over the past year. The share price has remained stable this year, reflecting a NIS 2.1 billion market cap for the company.
The Boston-based Fidelity group of funds, regarded as one of the world's largest investment funds, became a party at interest in Rami Levy in 2013, following a series of purchases in regular trading on the TASE giving it a 5% holding in the supermarket chain. The last of these purchases were at a company value similar to the chain's current market cap.
Another foreign concern holding shares in Rami Levy is the MSD fund, founded by Dell controlling shareholder Michael Dell. MSD became a party at interest in the supermarket chain when Levy sold it 4.8% of the chain's share capital for NIS 90 million. MSD currently holds 10% of Rami Levy's share capital, with a market value of NIS 200 million.
The Rami Levi chain published its 2016 financial statements in recent days, in which it reported a 14% rise in revenue to NIS 4.5 billion, supported by the opening of 16 new branches. The chain's gross and operating profits improved, and its net profit jumped 27% to NIS 94 million. The company also announced the distribution of a NIS 17 million dividend to its shareholders. Last month, Rami Levy appointed former Minister of Agriculture and Rural Development Yair Shamir as an external director in the company, thereby joining another ex-politician, former Minister of Communications, Industry and Trade, and the Environment Dalia Itzik, on the board.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 5, 2017
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