No Bids for Israeli Supermarket Chain Mega as Deadline Approaches

While some parties that had previously expressed interest have decided to forgo bidding, sources believe that some potential buyers are waiting until the last minute to make an offer.

Ofer Vaknin

The tender to buy struggling supermarket chain Mega ends at 4 P.M. Thursday, yet no bids have been placed. While some parties that had previously expressed interest have decided to forgo bidding, sources believe that some potential buyers are waiting until the last minute to make an offer.

Six groups have paid for the right to bid. Two of those groups told TheMarker Wednesday that they wouldn’t be participating, while the remainder stated that they hadn’t decided yet.

The owners of grocery chains Victory and Tiv Taam stated that they would not be bidding.

Rami Levy, owner of the discount Rami Levy Shivuk Hashikma supermarkets, has said he intends to bid even though the Antitrust Authority has stated it would not support him due to the size of his supermarket chain. Levy is also under investigation over allegations that his cellular subsidiary misused customer data.

The Sheva brothers, who own the vegetable wholesaler Bikurei Hasadeh, stated on Wednesday that they haven’t decided what to do. Another group, which includes Keter Plastic’s Yossi Sagol and the largest U.S. food retailer, Kroger, also apparently has not come to a final decision. Sagol returned from the United States on Wednesday.

Discount supermarket chain Yenot Bitan, which had been negotiating to buy Mega before the latter received court protection from creditors under a stay of proceedings, also has not yet decided.

The court accepted the position of Mega’s trustees, and ruled that potential buyers must participate in the trustees’ tender in order to bid. This was in order to block a potential purchase by businessman Moti Ben-Moshe that did not go through the tender. Ben-Moshe had been one of the owners of the IDB Group conglomerate, in partnership with Argentine businessman Eduardo Elsztain.

The trustees contacted the court on Tuesday after suspecting that Ben-Moshe, who purchased a controlling share in Mega’s former parent company, Alon Blue Square, would try to get around their tender by striking a deal directly with Mega’s creditors, which include suppliers, banks and bondholders.

It is not yet known whether Ben-Moshe intends to participate in the tender, but he has not paid to apply yet. However, he did schedule an urgent meeting with the trustees on Wednesday night.

The trustees stated Wednesday that they would be willing to accept only bids to buy the entire chain, which has some 120 outlets, and that they were not interested in selling off individual stores at this point.

Meanwhile, the Lod District Court accepted the trustees' request that Mega’s owners and executives be investigated over how they managed the company. The trustees intend to call executives and controlling shareholders in Mega, Alon Blue Square and Blue Square Real Estate for questioning.

The trustees also received approval to have an appraiser check Mega’s rental terms with Blue Square Real Estate, another Alon Blue Square subsidiary.

The trustees submitted a sharply worded report to the court a week ago, accusing Mega’s controlling shareholders of poor corporate management and conflicts of interest. The trustees alleged that Mega's owners depleted the chain of its assets and sent it into bankruptcy.

Most of the executives were directors of several companies within the Alon group at the same time, the trustees say, alleging that this led them to make decisions that were not in Mega’s interest.