Yossi and Shlomi Amir have submitted a bid to institutional investors to buy a controlling 24.9% stake in Shufersal Ltd. (TASE:SAE), at a company valuation of NIS 6 billion for the supermarket chain. The Amir brothers sold supermarket chain Freshmarket to Paz.
The Amir brothers have made the offer even though they signed a non-competition agreement with Paz, which does not expire until the end of 2024. If their attempt to buy a controlling stake in Shufersal succeeds, they plan opening negotiations with Paz on the matter.
Shufersal's share price is up 10% on the TASE today, giving the company a market cap of $5.7 billion. The current share price is NIS 21.6 with the Amir brothers offering to pay NIS 22.59 per share.
The Amir brothers have the cash resources for the offer. They see great potential in the Shufersal retail chain, headed by chairman Itzhak Abercohen and CEO Ori Watermann, despite the fear of an economic recession that could worsen due to the war. The Amir brothers, who founded the Freshmarket chain, have many years of experience in the retail industry, and the institutions could want to sell some of the shares they own in the chain to let them lead Shufersal's operations in the future.
Shufersal is owned by the largest insurance and investment institutions including Migdal, Harel, Clal, Menorah Mivtachim, The Phoenix and Altshuler Shaham. The company is run without a controlling core, and according to the plan, each of the institutions would sell 38%-39% of their holdings in Shufersal to provide the Amir brothers with a controlling 24.9% stake in the retail chain.
The Amir brothers sold the Freshmarket chain to Paz for NIS 2.1 billion in cash and Paz shares in the summer of 2021. As part of the sale, a non-competition agreement was signed between the brothers and Paz, which is valid until the end of 2024.
The Amir brothers offered to buy the 24.9% stake in Shufersal in March 2022 when the company was valued at NIS 7.5 billion. However, the Paz board of directors asked them to withdraw their bid, which they agreed to do. But now only 10 months remain until the non-competition agreement with Paz expires, and estimates are that much of that time would have passed until any deal is completed and the shares could be deposited with a trustee until the end of the year, or Paz might agree to shorten the agreement for a compensation payment.
Published by Globes, Israel business news - en.globes.co.il - on February 6, 2024.
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