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.
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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.