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Nearly two months after Nochi Dankner received an offer from Matthew Bronfman and Yakov Fisher for the controlling stake in Super-Sol - but declined to sell - Dankner's Discount Investment Corporation has announced that it will sell 19.8 percent of the supermarket chain to Bronfman and Fischer for $214 million.

The surprise transaction reflects a company value of $1.08 billion, a 30 percent premium over its share price on the Tel Aviv Stock Exchange.

The deal will be carried out in two stages. The first is scheduled for completion within 90 days of signature. Bronfman and Fisher will receive 13.9 percent of Super-Sol for $150 million.

In the second phase scheduled for June 2008, 5.9 percent of the company will be handed over for $64 million.

The agreement between the business groups includes arrangements on future transactions in Super-Sol shares. Among other things, IDB group member Discount Investments(through which IDB holds Super-Sol) will have a right of first refusal to buy back the shares from Bronfman and Fisher.

Sources in the Bronfman and Fisher camp report that Dankner has agreed to waive a substantial part of his rights as a controlling shareholder, including appointment of the chairman of the board. Fisher is expected to take the position of chairman now held by Avraham Biger, or fulfill the position jointly.

The main surprise in the announcement is that Bronfman and Fisher have agreed a deal for a fifth of the chain at the same premium agreed with Dankner in the failed plan in late January. The two refused to say why they had agreed to pay such a high premium while giving up on control. One possibility that now seems reasonable is that the two parties will return to the negotiating table in the future.

Earlier this year, Bronfman and Fisher sold their controlling interest in rival retailer Blue Square Israel - 23.5 percent - to the Alon group for $52.6 million. The two groups had been partners in Blue Square, but there had been tensions between them.

A few weeks later, Bronfman and Fisher sought to buy Super-Sol from Dankner. Many eyebrows were raised at the time, because although Super-Sol is about 40 percent larger than Blue Square in terms of sales, its profit margins remain lower than its competitor even without the Clubmarket purchase in 2006. Although Clubmarket went from an operating loss in the first quarter of 2006 to an operating profit in the last quarter of the year, it continues to hamper the profitability of its new owners.