Tel Aviv District Court Judge Varda Alshech yesterday approved the sale of bankrupt supermarket chain Clubmarket to rival Supersol, calling the possibly anticompetitive merger "the lesser evil."
She called on Antitrust Commissioner Dror Strum not to veto the merger. "It is a choice between evil and the lesser evil," she wrote in her ruling. "I have no choice but to approve Supersol's offer as the winning one, and expect the antitrust commissioner to reach a decision with the greatest possible speed," the judge wrote.
As an aside, Alshech wrote she was disappointed in the behavior of the original shareholders, the Borovich-Rosen group, who "chose to lounge on the side like a third party instead of helping the chain."
The judge extended the stay of proceedings protecting Clubmarket from creditors to October 30.
Clubmarket folded in early July under NIS 1.4 billion of debt, sparking intense criticism of its owners as the chain fell beyond payments to suppliers and creditors up and down the land.
During the hearing, Alshech blasted the Antitrust Authority, in the form of its representative Michal Halperin, over its handling of Supersol's billion shekel bid.
The authority is not happy about the bid from Supersol, even though the IDB group company offered twice as much as the second-highest bidder. The trustbuster is concerned that allowing the merger would impair competition: Israel had three supermarket chains, Clubmarket, Supersol and Blue Square Israel, and would be left with only two.
Halperin complained that consumers had no representatives before the court, adding, "In Beit She'an, there are only two supermarkets, one Supersol and one Clubmarket." To which Alshech replied: "And if Clubmarket is liquidated, what will there be there?"
Halperin argued that the Antitrust Authority was making every effort to reach a decision on Supersol's bid by September. "I cannot tell her Honor that I am asking her not to approve the transaction," Halperin told the judge, "but the trustees must take into account, as must her Honor, that an alternate deal would have to be approved in that case."
Alshech shot back: "Which offer? The one that provides nothing or the one that doesn't provide anything?"
Alshech also blasted Strum, for - in her words - negotiating with representatives of the bidders without any involvement of the chain's trustee managers. There is a difference between hearing what the contenders have to say, and negotiating," she said.
Halperin said the trustees had not done enough to pursue alternative offers for Clubmarket.
Alshech replied that the trustees had acted at the behest of the court. "I do not want to be hounded every hour of the day and in every state in the world with deferment requests because the bidders didn't even trouble to pick up the phone and say they had not been in a traffic accident, they were still alive," Alshech jibed.
Halperin concluded by saying she had brought it to the attention of the trustees and Alshech that the agreement with Supersol explicitly and unconditionally granted the Antitrust Authority the authority to approve or disapprove the deal. If the trustbuster approves the merger, Halperin warned, it will come with provisos and strings, and the parties had better prepare for the possibility that the deal might not happen at all.
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