Anyone present at today's court hearing on the fate of the Mega supermarket chain could not but be impressed by the work of the trustees appointed to run the chain, who within a few months managed to turn a collapsing business that attracted bids below NIS 200 million into the hottest goods on the market with bids climbing towards NIS 400 million.
Following the trustees' recommendation to the court that it should approve the merger of the Mega chain with Yeinot Bittan, all the potential buyers declared that they were prepared to improve their bids substantially.
The hearing, that went on for several stormy hours in the Central District Court in Lod, was attended by dozens of lawyers representing Mega's creditors, the official receiver, the rival bidders for Mega, Mega's employees, the farmers, and others. Also present were Rami Levy, Moti Ben-Moshe, Hagai Shalom, who owns the Tiv Taam chain, representatives of the consortium of bidders led by Shalom Simhon, and representatives of the Yeinot Bittan chain. Mega chairman Avigdor Kaplan was also in court.
At the end of the hearing, during which all the contenders threw improved bids into the air, Rami Levy declared that he was prepared to raise his bid to 20-25% above the winner's offer. "I want it recorded in the protocol that I'm prepared to raise the price by 25% above Yenot Bitan's price. 275 and another 25%, or to be more precise 26%." This declaration raises Levy's bid to NIS 360 million, considerably higher than any other offer.
Mega trustee Adv. Ehud Gindes said that Yeinot Bittan's bid should be approved in preference to all the other bids. "Yesterday evening, Yeinot Bittan signed a collective agreement with the Histadrut that is excellent for the workers, with agreement on decent pay and employment security," he said, "If Yeinot Bittan's offer is accepted, there is a collective agreement in place, and within two to three weeks we can come to a creditors' arrangement. We want to hand over this large and complex ship to an owner as soon as possible and start on a new course at Mega."
Gindes criticized the behavior of some of the bidders, who he said had tried to thwart the sale of the chain.
The representative of the Antitrust Authority at the hearing said that the Authority did not yet have a clear stance on a merger between Mega and Yeinot Bittan, and that examination of the matter would take about six weeks.
Explaining why the trustees had chosen to conduct a secret bidding process for the sale of the Mega chain, Adv. Amir Bartov, one of the three trustees, said, "We came to the conclusion that open bidding would not be helpful, and that there had to be a secret, discreet sale procedure that would look like individual negotiations, in which none of the bidders would know what any of the others were offering, and the fact is that this succeeded. Had we revealed all our cards and held a transparent pricing procedure with protocols, there would have been no bids."
Bartov added that, early last week, the trustees told Rami Levy that he had to raise his bid by NIS 100 million. "We told him explicitly that because of the regulatory problem he would have to win by a knockout and not on points. A few days after the sale proceedings began, I received a telephone call from someone at the Israel Tax Authority who told me 'We won't approve Rami Levy,' but we didn't want to lose a worthy bidder. We didn't know what would happen perhaps he would be the highest bidder, and so we fought.
"As far as Yenot Bitan is concerned, we were told by the Antitrust Authority that no objection in principle was expected to a merger with Mega. The antitrust commissioner was not born yesterday, and we ask the court to limit the Authority's examination to two weeks.
"As for Ben-Moshe," Bartov said, "he refused to raise his bid to the price we asked. Tiv Taam said they would see us in court and give their bid there. With Yeinot Bittan, we agreed on the terms from first to last. That wasn't the case with the other bidders; they all objected to the wording of the agreement." In conclusion, Bartov asked the court to approve the agreement with Yeinot Bittan. The official receiver concurred with the trustees' stance, and said that there was no reason to conduct further pricing and that Yeinot Bittan's bid should be accepted.
Published by Globes [online], Israel business news - www.globes-online.com - on May 16, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016