Gaydamak Buying Tiv Taam for $100m

Arcadi Gaydamak's shopping spree has not yet ended. He recently purchased control of real estate company Ocif, investment house Gilon and gas station owner Petro Group, for a total of NIS 850 million for all three - and all in only three weeks.

Now Gaydamak has marked a new target, a 51 percent controlling stake in supermarket chain Tiv Taam. It is now controlled by Amit Berger - the controlling owner of investment house Enter Holdings - and Kobi Tribitch, the founder.

The deal is expected to go through at a value of NIS 820 million, a price 80 percent above the company's market value on the Tel Aviv Stock Exchange (TASE) on Friday - NIS 447 million. Gaydamak will be paying about $100 million for his controlling share.

Tiv Taam reported to the TASE on Friday night that according to the agreement with Gaydamak, both Tribitch and Berger would sell 25.5 percent of the company to Gaydamak, and Enter would also transfer 3.242 million options. After the sale, Enter would remain with 13 percent of the chain, and Tribitch with 12 percent.

Berger, who bought 50 percent of Tiv Taam only a year ago, had said recently that the chain was not for sale. It seems that he had turned down a number of other offers, but Gaydamak's incredible price gave both owners an immediate $50 million each. This represents a 330 percent return on Berger's original $32 million investment. The owners refused to speak to the press yesterday, and left Gaydamak to do the talking.

Even though both Berger and Tribitch will retain significant holdings, it is not clear what role Tribitch, who founded Tiv Taam in 1990, will play in the company's future. Also, it is not at all clear what the future of CEO Dov Shneidman will be. He did not respond to reports of the sale.

Tribitch founded Tiv Taam to sell non-kosher and imported food stuffs. At first the chain was targeted at the Russian market, but a few years ago it managed to break into the regular Israeli market, by including a more sophisticated culinary niche.

The chain now has 23 stores and a 3.5 percent market share in food sales. Plans were to reach 60 stores by 2009. Revenue forecasts for 2007 are NIS 1.3 billion, up from a billion in 2006. The hope was to turn Tiv Taam into the third largest chain and compete with the two major players, SuperSol and Blue Square.

Gaydamak's investment should allow the chain to grow faster and possibly even expand overseas.

Yesterday Gaydamak told Channel 2 that he intends on removing the non-kosher food from the chain. After non-kosher items were also taken off the shelves of AM:PM markets, as a result of the purchase of the Tel Aviv based, city-center chain by the owners of Blue Square, the non-kosher food chains will be cut way back - at least until some new entrepreneur enters the market.