Shufersal sale cancelled

Sources tell 'Globes' that Bronfman Fisher Investments Ltd. and Leo Noe were demanding that Nochi Dankner lower his asking price for controlling interest in Shufersal.

November 22, 2011 07:41
1 minute read.
A man shops in a supermarket

Man shopping in supermarket 260. (photo credit: REUTERS/Fabrizio Bensch)

After the market closed today, Shufersal Ltd. announced that the sale of the controlling interest in the company to Bronfman Fisher Investments Ltd. and Leo Noe has been cancelled.

Sources inform “Globes’’ that Bronfman Fisher Investments Ltd. and Leo Noe were demanding that Nochi Dankner lower his asking price for the controlling interest in Shufersal, Israel’s largest supermarket chain. The parties also disagreed over who will pay the bonus that Shufersal’s employees are demanding for the sale.

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Dankner controls Shufersal through IDB Holding Corp. Ltd. unit Discount Investment Corporation. He wanted the buyers to pay the bonus to Shufersal’s 12,500 employees; the buyers wanted Dankner to pay it.

On Thursday, Shufersal and Bronfman Fisher subsidiary Isralom Investment Ltd. notified the Tel Aviv Stock Exchange (TASE) that they had extended the deadline for closing the deal until November 24.

A source close to the deal told “Globes” on Monday that closing the deal hinged on the price.

Under the letter of intent, Discount Investment was due to sell its 46% stake in Shufersal to Isralom and Noe for NIS 2.4 billion at NIS 24.20 per share, giving a 47% premium on the share price at the time.

Noe’s share of the deal was NIS 1.7 billion. Isralom, which already owns 18.6% of Shufersal, would have increased its stake to 32.3%, the same size as Noe’s stake.

Discount Investment was to receive NIS 650 million when the deal was closed and the remaining NIS 1.8 billion over five years, with an option to extend the payments by a further year.

Shortly after the deal was first announced, Shufersal workers committee chairwoman Ariella Siso demanded negotiations to safeguard the employees interests under their collective agreement and a sale bonus. The Histadrut labor federation also announced a labor dispute at the company.

The source said that there was no other buyer for Shufersal. He also denied rumors of disagreements between Noe and Matthew Bronfman and Shalom Fisher.

This was the third time that Bronfman and Fisher have tried to buy out Dankner in Shufersal.

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