The Shalom Simhon group today notified the trustees for the Mega retail chain that they had not reached agreements for acquiring all the Mega branches, and were no longer attempting to buy the chain, owing to opposition from the workers.
Simhon said, "There was a historic window of opportunity to change competition in the economy, but because the group did not manage to agree on the acquisition of all the branches, we must abandon our bid. We are personally regretful, and are still convinced that strengthening the small and medium chains is the economically right thing to do. In view of the results, however, it seems that the most that can be achieved is simply not good enough. We made great efforts all weekend to come up with a bid meeting the trustees' conditions, and were unsuccessful in the end. The conditional bid does not meet the tender requirements, so we are out of the picture."
Simhon's bid was NIS 226 million, on condition of lower rent for the branches. In effect, the Simhon group is offering NIS 160 million and NIS 66 million more, subject to lowering the rent on 37 branches. The group, which also included Rabbi Lior Gabay, CEO of the Neot Margalit day care centers, planned to operate Mega through 13 small retail chains combined in a purchasing group that would make it possible to expand their activity and better compete in the market.
Meanwhile, businessman Moti Ben-Moshe, who has acquired Alon Holdings Blue Square - Israel Ltd. (NYSE: BSI; TASE: BSI), contacted the trustees on Friday, and told them he intended to also acquire the Mega chain, a few hours after the tender was over. The trustees today sent him a letter severely criticizing his conduct, and accusing him of trying to persuade the other parties interested in acquiring Mega not to submit bids in the tender.
The trustees' letter to Ben-Moshe's legal representatives states, "Only at the last minute on Friday before the Sabbath, after the deadline for bids in the tender had passed, did you choose for the first time, in a phone call to one of the trustees, to ask for a meeting about an arrangement including the acquisition of Mega. That let the cat out of the bag. The ink from the conversation was not yet dry when a messenger was sent from your client to speak with the Histadrut (General Federation of Labor in Israel) chairman about the acquisition of Mega by your client."
The Mega trustees are also accusing Ben-Moshe of trying to prevent others from submitting bids in the tender. "The trustees have received clear reports that your client has contacted various parties interested in acquiring the company in a manner designed to keep them from submitting acquisition bids," the trustees wrote. "Furthermore, your client has been playing a double game: on the one hand telling the trustees that he did not intend to submit a bid for Mega, while on the other hand spreading rumors that he intended to buy the company."
Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2016
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