Creditors Approve Sale of Mega Supermarket to Yenot Bitan, Bringing Deal Closer

Receiving blessings from the Antitrust Authority will be the last step in securing sale of major supermarket chain.

Ofer Vaknin

A majority of creditors approved by a wide margin Yenot Bitan’s bid for the bankrupt Mega supermarket chain and the terms of a bailout, the trustees overseeing the sale told the Central District Court Monday.

The vote was held on Thursday but its outcome was only made public Monday. The result was a significant victory for the trustees, who had come under fire for granting Yenot Bitan the exclusive right to make an offer for Mega even after other prospective buyers revised their bids upward.

Discount grocery king Rami Levy and Moti Ben-Moshe, who is buying control of Mega parent company Alon Blue Square, had sought to delay the sale and have the creditors weigh their bids also well, but last week Judge Ilan Shilo rejected their demands.

“The creditors have spoken clearly and forthrightly. A wide majority of creditors, from all the groups ... approved the debt arrangement for Mega as well the agreement selling Mega to [Yenot Bitan]. It should be noted that Mega’s suppliers expressed wall-to-wall support,” the trustees said in a statement. 

More than 99% of the preferred creditors, who include Mega’s employees, backed the Yenot Bitan offer, both weighted by ordinary votes and weighted by money owed. Mega suppliers, who are unsecured creditors, also backed the deal by votes of 89% and 98%, respectively. 

“With the approval of the creditors, and subject to approvals of the antitrust commission and any conditions she sets, control of Mega shares will be transferred to Yenot Bitan,” the trustees said.

If completed, the acquisition of Mega and its some 125 stores will vault Yenot Bitan, a medium-sized privately controlled chain, into Israel’s second-largest supermarket chain, with about 200 stores. Rami Levy would be third in terms of market.

However, the acquisition still hinges on an opinion from the Antitrust Authority, which is expected to release one in about 10 days. Unlike with the Rami Levy bid, where the authority  expressed its reservations at the time of the bid, it was not known to have offered a preliminary opinion on Yenot Bitan even though two weeks have passed since the trustees recommended to the court that Yenot Bitan’s bid be the preferred one.

However, last Thursday the authority said in a press release that it had informed the trustees two days before about its concerns over the Yenot Bitan acquisition.

Regulators are reportedly focusing in particular on eight geographical areas where Mega and Yenot Bitan together already dominate the market. They could make approval conditional on Yenot Bitan selling certain stores. They also examining the likely impact of the relationship between Yenot Bitan and produce wholesaler Bikurei Hasadeh on competition in the supermarket sector.