In a dramatic notification to the Tel Aviv Stock Exchange (TASE) this morning, Israeli food manufacturer Osem Investments Ltd. (controlled by Nestle SA (SWX:NESN)) (TASE: OSEM) reported that its controlling shareholder Nestle wants to buy the shares in Osem held by the public, and thus delist it from the TASE.
Nestle is offering to pay NIS 82.50 per share, a more than 25% premium on the market price. The public currently holds a 36.32% stake in Osem. Nestle's bid would reflect a company value of about NIS 9.13 billion.
Osem will convene a general shareholders meeting on March 17 to consider Nestle's bid.
Osem has revealed that on October 26 2015, the board of directors discussed the possibility of going private and delisting from the TASE. At the same meeting, it was decided to delay announcing the matter before talks were completed and a final decision was taken on the issue.
A special committee was set up to examine the option and after three months it decided to approve the purchase of the public's shares as fair and beneficial for Osem and the committee recommended that the board approve the measure.
Osem is Israel's third largest food manufacturer after Tnuva Food Industries Ltd. and Strauss Group Ltd. (TASE:STRS). According to Storenext, in 2015 Osem held a 9.3% market share of Israel's food sector in financial terms after a 0.4% rise in revenue. Last year, consumers purchased NIS 3.17 billion in Osem products.
Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2016
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