Azrieli in Talks With David Weismann to Sell Him Sonol

Sale of filling station-convenience store chain snagged by issue of loan to man who once led Alon Blue Square.

Nir Keidar

David Weismann, who is widely blamed for the collapse of the Alon Blue Square group and its Mega supermarket chain, is in advanced talks to buy the Sonol chain of filling stations and convenience stores, seller Azrieli Group said on Tuesday.

It offered no details but did say other groups, mainly from overseas, were interested in buying Sonol, which has been on the block for some time and came close to being bought in the summer of 2014. Azrieli said it had reached understanding with potential buyers, but no binding agreements as of now.

Sources close to the talks said Weismann and other potential buyers were talking about a 500 million-shekel ($126 million) valuation for Sonol, which operates about 230 outlets nationwide.

They said a major obstacle to completing the negotiations with Weismann was the issue of a loan from Azrieli to help cover the cost. Weismann is believed to have personal capital of more than 150 million shekels, mainly in the form of tradable shares in Alon Gas Exploration and Alon USA. But he would need a substantial loan to cover the rest of acquiring Sonol. Bank loans are inaccessible to him after the collapse of Alon Blue Square, which he ran until a year ago. In addition, he hold a 20% stake in Bielsol, Alon Blue Square’s parent company and also the controlling shareholder of Alon Israel, a fuel retailer that competes with Sonol.

Azrieli, whose shares fell 3.2% to 140.20 shekels in Tel Aviv Stock Exchange trading, has been seeking to offload Sonol as part of its strategy of divesting business not connected to its core real-estate operations. It is Israel’s biggest shopping mall manager and has a portfolio of office space.

On Tuesday, the company said it had reached an agreement with Lodzia-Rotex Investment to buy a 53-dunam (14-acre) site with commercial and industrial buildings in Holon for 280 million shekels that it aims to develop along with other property it has in the area.

In it last quarterly report, published in November, the company said it was writing down 80 million shekels against good will for Sonol to just 72 million. With the price of oil and gasoline falling, Sonol finished the quarter with a 10 million-shekel operating loss, turning around from a 22 million profit the same time in 2014.

Azrieli is counting on the sale of Sonol and other assets belonging to its Granite Hacarmel group to provide it capital for expanding its real-estate holdings. In recent years it has sold off the paint maker Tambour to a Singaporean buyer for 500 million shekels, and the Palmahim desalination plant to the Israel Infrastructure Fund for 430 million shekels. It also sold Supergas’s solar farm for 175 million shekels and sought to sell Supergas itself to Tadiran for 250 million shekels.

Apart from Sonol, another company still on the block is its infrastructure company GES.