Three bids have been submitted ahead of the deadline in the second auction trustees are holding to sell the bankrupt Mega supermarket chain, TheMarker has learned.
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Offers have been submitted by discount food retailer Rami Levy and Bikurey Hasade – Israel’s largest fresh produce wholesaler. Both also made bids in the first auction. This time, they were joined by Moti Ben-Moshe, the Israeli-German entrepreneur who’s due to buy control of Mega’s parent company, Alon Blue Square.
Sources said the offers for Mega, which counts 126 stores – most of them Mega in the City neighborhood supermarkets – range between 200 million and 250 million shekels ($53 million-$66 million), not counting inventory held by the chain.
That would mark a big increase on the 150 million to 160 million shekels range that bidders offered the first time Mega was put up for sale earlier this year. Trustees, who rejected those offers as too low and opted for a second auction, will be examining the bids this week.
Rami Levy and Bikurey Hasade have reasons to raise their offers now as the chain’s finances have improved. In a report last week to Lod District Court – which is overseeing Mega – it was revealed that the food retailer had moved into the black in March, posting a 500,000-shekel operating profit, compared with losses running at more than 20 million shekels a month before the chain won court protection from creditors in January.
Rami Levy and Bikurey Hasade will both face antitrust scrutiny over their offers. Industry sources said Rami Levy would face particularly big obstacles since it is already such a big player in the sector and earlier attempts to buy Mega ran up against antitrust warnings. But, they said, Rami Levy would fight any decision against it in court.
Regulators will also likely look askance at Bikurey Hasade’s buying Mega because the wholesaler is a partner with Neto, a major food importer in a joint venture business. Bikurey Hasade has responded by saying that Neto isn’t involved in the Mega offer.
But the two companies’ actions have raised doubts about that. When Ilan Sheva, one of two co-owners in Bikurey Hasade, met with regulators, Neto CEO Ami Goldin attended the meeting. Sheva insisted subsequently that Goldin came as a financial adviser, not as a partner. Despite that, antitrust regulators are less concerned about a Bikurey Hasade bid.
Ben-Moshe’s offer came last Thursday – the last day to submit bids – after lengthy negotiations with Mega’s trustees. Ben-Moshe has offered to buy Alon Blue Square for 115 million shekels and a commitment to put 900 million shekels more into the company to cover its debts to banks and bondholders.