Israel Salt to Finance Zeevi's Bid for Ace

Israel Salt Industries, controlled by Meir Shamir and the Dankner family, will loan Gad Zeevi NIS 9 million to buy the Ace Buy & Build DIY chain.

Zeevi extended the highest bid in the tender to purchase Ace, but he made putting up the required bank guarantees conditional on indemnification against future claims by the chain's receiver.

The Tel Aviv District Court will have to rule on who will buy the chain, with the two current contenders being private equity fund Markstone and Gaon Holdings, with former Ace Buy & Build partner Shlomo Zabeida. It is not clear whether the Tel Aviv court will let Zeevi rejoin the bidding.

According to the agreement, Salt Industries will grant the NIS 9 million loan in return for an option to purchase 50 percent of Ace shares, good for six months from Zeevi's purchase of the company.

Judge Danya Kareth Meyer will also have to rule on whether Zabeida - Zeevi's former partner in Ace - can bring in the Gaon group to join him in his bid, as Markstone contends that in practice, Zabeida is selling Gaon his first right of refusal, which he is not allowed to do.

The two offers are similar, about $20 million.

Ace announced yesterday that it had signed an agreement to extend its franchise from the international Ace group for another 10 years.