Osem Shares Soar After Nestle Offers to Buy Rest of Company

Swiss company tells minority shareholders it will pay 82.50 shekels a share, 26% more than Wednesday's closing price.

David Bachar

Shares of Osem, Israel’s biggest publicly traded food company and the maker of many of the country’s most popular food products, soared on Thursday after the Swiss company Nestle SA said it would buy the rest of Osem it doesn’t already control.

Nestle offered Osem shareholders 82.50 shekels a share – 26% premium on its closing price on Wednesday – for Osem for a combined 3.3 billion shekels ($840 million), Osem told the Tel Aviv Stock Exchange.  The offer values the whole company at 9.13 billion shekels

Osem shares were up 22.2% at 80.32 shekels late morning in heavy trading.

The acquisition would take Osem private and leave Strauss Group as one of the few major Israeli food company not controlled by foreign investors. China’s Bright Food bought dairy maker Tnuva, the largest food company, last year and Telma has been owned by the Anglo-Dutch company Unilever since the 1990s and is now called Unilever Israel.

Nestle acquired it first stake in Osem in1998, and as of Thursday controlled about 63.7% of the company. The offer will be presented to Osem shareholders at an extraordinary meeting on March 17, Osem said.

Delisting Osem, one of the biggest companies traded on the TASE and part of the TA-25 index, will be a big blow to the bourse, which has been fighting a losing battle to keep companies listed and encourage new ones to join.