Capital market sources say Koor would gobble up 20-30% of the grocer at a $80-100 million company value. Koor chair Charles Bronfman confirmed the report in an interview with TheMarker.
The market sources added that Tiv Taam is also in talks with investment fund Markstone, although Markstone denied the report.
Koor CEO Jonathan Kolber recently said the conglomerate is looking for new investments, after stabilizing its financial structure and cutting its bank debt.
Koor's major holdings at the moment are in fertilizer maker Makhteshim Agan and in communications equipment manufacturer ECI Telecom. The group recently sold off its defense holdings.
Koor hasn't been involved in grocery chains to date, but Nochi Dankner's IDB group recently purchased a 10 percent stake in Koor. IDB is the controlling shareholder in grocery retailer Supersol. As a result, it is possible the Koor investment in Tiv Taam will not increase competition in the sector, but could diminish it.
Tiv Taam has 16 branches, most recently a 6,000 square meter Be'er Sheva branch that involved a NIS 25 million investment and a flagship store in Rishon Letzion that opened less than a year ago. The company has said it will invest NIS 30 million in new branches in 2006.
CEO Kobi Trebish, who began developing the chain out of his father's stall in Tel Aviv's Carmel Market in 1990, has declared he plans another major branch in northern Israel as soon as he finds the perfect location. Trebish has set his sights on a 10 percent market share in retail groceries, while the current market data indicates the chain reached 7 percent in 2005.
Tiv Taam declined to comment for this report.
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