Russian restaurant wins Burger Ranch
The winner of the Burger Ranch fast-food chain tender is a Cyprus-registered corporation, G.M.R. WorldWide Hospitality Limited.
The winner of the Burger Ranch fast-food chain tender is a Cyprus-registered corporation, G.M.R. WorldWide Hospitality Limited. The company submitted a NIS 17 million bid, plus VAT, for all the shares, or for Burger Ranch's assets and operations, according to a request submitted to the Tel Aviv District court yesterday by temporary liquidator Shaul Bergerson and receiver Shlomo Nass.
WorldWide Hospitality operates over 160 restaurants in Russia and has promised to keep Burger Ranch operating.
The court was asked to approve the sale, and District Court President Judge Uri Goren is expected to rule today after a hearing. If approved, the agreement will take effect from Sunday, September 28. Bergerson and Nass say approval is needed urgently so that management can be transferred to the new owners as soon as possible. They say that would minimize the damage to those injured by the chain's collapse and enable them to receive at least some of the money owed them. Bergerson and Nass explained that the offer was the best they had received and said they preferred to sell the shares, and not just the operations and assets.
Thirteen groups bought the tender documents, though only five made bids after examining Burger Ranch's books.
The winning bid from G.M.R. Worldwide Hospitality was raised from NIS 16 million to NIS 17 million, NIS 13 million of the sum in cash and the rest in biannual payments over two years.
The low bid was for NIS 3.5 million from the Assaf Greenberg group, and it came with a number of strings attached.
American firm HJ.INC bid NIS 5.18 million. It raised it later to NIS 16.18 million, but never provided the required guarantees.
Another bid came in at only NIS 4.5 million.
Burger King, or A. Orgad Holdings Ltd., offered NIS 16 million, but later raised it to NIS 20 million during the negotiations. However, only half of this was to be in cash, and the rest spread out over five years.
The receiver and liquidator entered into negotiations with the three highest bidders, and marathon meetings were conducted with the three groups in order to improve their offers.
In the end, the winner was chosen over Burger King because it offered more cash. In addition, WorldWide Hospitality struck Nass and Bergerson as being more professional as well as having considerable experience in fast food.
Also, a purchase by Burger King would have required approval by the Antitrust Commissioner, while the winning offer will probably only require perfunctory antitrust approval as G.M.R. WorldWide Hospitality has no Israeli business operations, whereas Burger King's purchase of its former competitor would be problematic.