Dealbreakers / What Price for Revenge?

How much is revenge worth? 28 percent above market - or at least that is the price Matthew Bronfman and Yakov Fisher are willing to pay Nochi Dankner for almost 20 percent of Super-Sol. Yes, a control premium for a minority stake and a foot in the door to be first in line to buy control - if Dankner changes his mind and gets rid of his multi-branched baby.

Is Super-Sol worth that much? $1.08 billion? Stock market players say no. So why did Bronfman and Fisher, who recently parted ways with David Wiessman in rival retailer Blue Square, pay such a high price? The answer is simple: revenge, or a little more childishly, "na na na, Dudi Wiessman."

Bronfman associates will deny any such motive, but the ego wars the two conducted in the past cast doubts on the denials. Wiessman and Bronfman have not abstained from name-calling in the past.

Bronfman and Fisher will apparently have more influence than the size of the stake implies. Financial market players expect Avraham Bigger, Super-Sol chair as well as CEO and chair of Makhteshim-Agan that he is working hard to rehabilitate, will give up his chair at Super-sol to Fisher, no small retail fox, who will join forces with CEO Effi Rosenhaus, whom Dankner has called in private conversations "a marketing genius."

Wiessman and Blue Square will feel the new competition mostly in the ultra-Orthodox market - the big edge Fisher brings to Super-Sol. Dankner probably also understands that. The man who grew Blue Square's Haredi retail chain Shefa Shuk, will try to repeat the feat where Super-Sol has traditionally been the weaker player. It's likely he won't do it alone, and Blue Square will have to deal with a series of executives, even senior ones, who opt for the Super-Sol route.

All is fair in war. The fact Dor-Alon owns the AM:PM chain that is open on Saturdays (the official reason for the Bronfman-Fisher split from Dor-Alon), will serve in a battle for the Haredi street. It is likely Blue Square and its three subsidiaries will suffer a glatt kosher onslaught. The retail market believes Nochi will continue to avoid Saturday operations at Israel's largest retail chain and will not give up kosher certification.

Bronfman-Fisher associates hope that 20 percent is just a first stage. Just a few weeks ago, Dankner and Bronfman negotiated for control of the chain, but at the last minute Nochi decided not to sell, for reason mostly considered emotional.

Nochi believes he can improve Super-Sol's profitability to operating profits from just 3.1 percent to 5-5.5 percent, despite swallowing the hemorrhaging Clubmarket in the past year. Blue Square, by the way, has already hit the 4.9 percent mark.

Retail market sources believe negotiations are ongoing on the continued sale. The present deal doesn't include any future options, but official closing is three months away. The new partnership paves the way for Super-Sol to gain a competitive edge in real estate. The major obstacle to opening new branches is a lack of locations, which dovetails with Bronfman's commercial real estate ambitions.

The question remaining is the fate of the partnership between Blue Square and credit card company Visa CAL in Diners. Visa CAL belongs to Bronfman's Israel Discount Bank. Blue Square club card You is issued on a diners platform. Bronfman associates say there is no problem, and promise Chinese wall mechanisms. Will that be enough for Wiessman? That's not a given.