Arcadi Gaydamak is buying Tiv Taam - and plans to turn it kosher
This fourth acquisition in a month is again at a huge premium: Agreed to pay $100m for the supermarket chain
Is Tiv Taam going to turn kosher? Winston Churchill might approve: "I am fond of pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals." (1874-1965)
Arcadi Gaydamak is buying the controlling interest in Tiv Taam, a chain of non-kosher supermarkets, for a handsome premium.
Gaydamak certainly seems to want to make a mark. In just over a month the Russian-Israeli billionaire has bought four major companies, each time sending its stock soaring as he closed deals for top price.
Just last week he agreed to buy Gilon Investments (TASE: GILN) Investments and Ameris Holdings, the latter of which controls the Petro Group chain of gas stations. Before that he signe Dankner deal to buy real estate company Ocif Investment & Development (TASE: OCIF).
The three, not including Tiv Taam, are costing him NIS 850 million.
Gaydamak's latest target is a 51% controlling stake in supermarket chain Tiv Taam, presently controlled by Amit Berger - the controlling owner of investment house Enter Holdings - and Kobi Tribitch, the founder.
The deal is expected to go through at a value of NIS 820 million, a price 80 percent above the company's market value on the Tel Aviv Stock Exchange (TASE) on Friday - NIS 447 million. Gaydamak will be paying about $100 million for his controlling share.
Tiv Taam reported to the TASE on Friday night that according to the agreement with Gaydamak, Tribitch and Berger will each sell 25.5% of the company to Gaydamak, and Enter would also transfer 3.242 million options.
Post-transaction, Enter will have 13% and Tribitch, 12%.
Berger, who bought 50% of Tiv Taam only a year ago, had said recently that the chain was not for sale. Reportedly he had turned down a number of other offers, but Gaydamak's incredible price gave both owners an immediate $50 million each. This represents a 330% return on Berger's original $32 million investment. The owners refused to speak to the press yesterday, leaving Gaydamak to do the talking.
Even though both Berger and Tribitch will retain significant holdings, it is not clear what role Tribitch, who founded Tiv Taam in 1990, will play in the company's future. Also, it is not at all clear what the future of CEO Dov Shneidman will be. He did not respond to reports of the sale.
Tribitch founded Tiv Taam to sell non-kosher and imported food stuffs. At first the chain was targeted at the Russian market, but a few years ago it managed to break into the regular Israeli market, by including a more sophisticated culinary niche.
The chain now has 23 stores and a 3.5 percent market share in food sales. Plans were to reach 60 stores by 2009. Revenue forecasts for 2007 are NIS 1.3 billion, up from a billion in 2006. The hope was to turn Tiv Taam into the third largest chain and compete with the two major players, SuperSol and Blue Square.
Gaydamak's investment should allow the chain to grow faster and possibly even expand overseas.
Yesterday Gaydamak told Channel 2 TV that he intends on removing the non-kosher food from the chain.
After non-kosher items were also taken off the shelves of AM:PM markets, as a result of the purchase of the Tel Aviv based, city-center chain by the owners of Blue Square, the non-kosher food chains will be cut way back - at least until some new entrepreneur enters the market.
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