Ikea sale marks end of society's era
The sale of its 75 percent control of Ikea Israel to Canadian-Jewish businessman Matthew Bronfman for $33 million - in a deal that was inked late Wednesday night - symbolizes the end of the road for the Co-Op Blue Square Consumer Cooperative Society.
This final deal in the grand property sale for the co-op society has been a lengthy process, having to beat off the veto held by the global Ikea chain. The local branch has been a great success, whether measured by the NIS 340 million revenues a year, or the length of traffic jams around Poleg junction on a Friday. Ikea Israel plans to open its second branch in South Tel Aviv.
The buyer, the price, the paper - all seem set, and it is reasonable to assume that within two months the deal will be completed, and the co-op society will finally tot up its proceeds and split the funds among its society members. Each is expected to walk away with a check of at least NIS 50,000-60,000.
The society's tale began way back in the 1990s, when one society member, an attorney by the name of Eliezer Levitt, took up the cause of all members who felt somewhat peeved by the restrictions on transferability of their society membership. They couldn't sell, they couldn't pass it on - even in death - and if they chose to trade it in, the co-op society was prepared only to make a symbolic compensation of a few shekels. And yet, the society had assets that had grown over the years. Other than its real estate holdings, it owned the Blue Square supermarket chain, control in the department chain Hamashbir Lazarchan, and the 75 percent stake in the Ikea Israel concession.
With a new court-approved secretariat in place, headed by attorney Lipa Meir - to replace the body rejected by the Registrar of Cooperative Societies, after he declared its election null and void - it was decided to take the sell-off/pay-out route to fortune.
Auctioning control of the Blue Square supermarket chain was relatively quick. Again Bronfman was among the winning bidders, together with the Alon group, which snapped up the retailer for NIS 1.4 billion.
Hamashbir Lazarchan was not a success story. The company failed, and although its operations have been sold off, the receiver is currently examining the possibility of filing suits against senior executives of the Co-Op Society for mismanagement.
And third comes Ikea Israel, sold Wednesday to Bronfman. The deal must be approved by the court before any distribution of proceeds goes ahead.
After Blue Square was sold, and paying 12 percent in tax after reaching an accord with the government, holders of the dated, nonnegotiable Co-Op Blue Square Consumer Cooperative Society membership cards were treated to their first windfall: NIS 40,000. Some 18,000 individuals were paid, and a further 2,000 descendants of deceased members. An additional 2,000 members, according to the books, have yet to claim their share. That's a total cash handout of NIS 800 million. The society is holding on to NIS 50 million until the outcome of a legal dispute with 986 Blue Square workers is resolved, and more than NIS 100 million in the event of a comeback from Hamashbir's receiver.
Next week, the second dividend of NIS 4,000 per member is due. Once the Ikea deal is complete, the society will have a further NIS 142 million, in addition to the sale of property in the Dizengoff Center, Tel Aviv, which is expected to generate some NIS 100 million - and then all those society members can finally go home, richer.
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