China's Bright Food Gets 3-month Extension on Acquisition of Israeli Dairy Giant Tnuva

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Tnuva offices in Petah Tikva, Israel. Credit: Moti Milrod

REUTERS - China's Bright Food Group Co has received a three-month extension to complete its planned acquisition of Tnuva, Israel's biggest food company, a shareholder in the Israeli firm said on Sunday.

Bright Food now has until Jan. 5, 2015 to buy control of Tnuva from British private equity firm Apax Partners, investment group Mivtach Shamir Holdings said in a statement to the Tel Aviv Stock Exchange. It did not provide further details.

"We believe the deal will close," said a source familiar with the agreement who asked not to be named.

If Bright Food does not go ahead with the purchase at this point, it will have to pay a fine of $20 million to $40 million, the source said.

In May, Bright Food agreed to buy 56% of Tnuva from Apax in a deal that values the Israeli dairy company at $2.5 billion.

Mivtach did not say what was holding its originally scheduled Oct. 5 completion. But the Israeli website Calcalist said the Chinese group was concerned by a 3.5% drop in Tnuva's sales in the first half of 2014 as well as by a decline in sales over the summer due to the 50-day Gaza war.

Bright Food has asked for more time to further evaluate Tnuva's results and is seeking an adjustment in the terms of the deal that would result in a small discount of up to 30 million shekels ($8.1 million) on the price, Calcalist said.

Apax officials declined to comment.

Mivtach, which owns 21% of Tnuva, has a "tag-along" option to sell its holding to Bright Food in accordance with the terms of the Apax sale. A group of kibbutzim, or cooperative farms, owns the rest of Tnuva.

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