Banks Tighten Screws on Clubmarket

The Clubmarket chain is not out of the woods yet. Its sale to Supersol is still subject to approval by the Antitrust Authority.

The Clubmarket chain is not out of the woods yet. Though Tel Aviv District Court Judge Varda Alshech approved Thursday the sale of the troubled chain to Supersol, the deal is still subject to approval by the Antitrust Authority, which must weigh the implications of Supersol, the country's largest retail chain, buying Clubmarket, the third largest. And now, Hapoalim and Leumi banks have announced that they will not be extending credit to Clubmarket beyond August 31. They noted that since the chain was granted court protection from its creditors last month, the banks have injected some NIS 140 million into the company. The message from the banks is clear: If the chain is not sold and taken over by its new owners by Thursday, it will collapse.

Supersol management also drew attention to its offer to buy the chain - in which it bid a sum of NIS 825 million (almost twice the second-best bid) - and the agreement it signed with Clubmarket's court-appointed trustees, in which the sides agreed that if the deal is not consummated by September 1, the contract is voided.

In her decision Thursday, Alshech approved the sale to Supersol, calling it "the lesser of two evils," and took the opportunity to knock the Antitrust Authority. She did not mince words in slamming the authority in its handling of the matter, criticizing its stand, which could jeopardize the deal and hence Clubmarket's future, and hoped that "the authority would reach its decision with the greatest possible speed." She extended Clubmarket's court protection until October 30.

Antitrust Commissioner Dror Strum responded that, with all due respect to Judge Alshech, the final decision rests with him and not the court. "It's very popular to be all for competition, until you have to pay the price," he said.