(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
In a surprise development, the Yeinot Bittan supermarket chain, owned by Nachum Bittan, looks set to buy the financially troubled Mega supermarket chain. Mega’s trustees have recommended to the court that it accepts the bid from Yeinot Bittan from the six bids that were received. The trustees revealed that Yeinot Bittan has bid NIS 275 million for the Mega chain.
The trustees received six bids to buy Mega as an entire concern, all of them substantial improvements on the bids first submitted when the sale process began. The bids included agreements to manage talks with the Histadrut and Mega’s workers committee and continue employment them with a long-term collective agreement.
Histadrut Chairman Avi Nissenkorn said called the news important “not only to the 3,500 families but for the economy as a whole and the food retail sector in particular.”
In addition, Yeinot Bittan’s bid includes purchasing Mega’s inventory, which has an estimated value of NIS 130 million.
The trustees said that Yeinot Bittan’s bid was the best of the six in virtually every criteria.
The Lod District court appointed trustees to oversee the possible sale or liquidation of Mega in January, after it failed to make a NIS 50 million payment to suppliers and planned to lay off some 3,500 workers, as it struggled to pay some NIS 1.2 billion worth of debt.
In late 2015, the struggling chain sold off 17 stores to Victory and Johananoff for NIS 95 million, and six more stores in its You discount chain to Rami Levy for 18 million.
Ilanit Scherf, who heads a research division at Psagot Investment said the deal was a much higher valuation than estimated in previous sales talks, and noted that there would be other costs.
“Given the state of Mega’s branches, there will be a need for an investment of NIS 100m- NIS 150m beyond the cost of the acquisition,” she said.