Minority IKEA Shareholders Could Sell Out to Bronfman

Tel Aviv District Court Judge Uri Goren cleared the way yesterday for Matthew Bronfman to acquire Blue Square Co-Op Society's 75 percent stake in Ikea Israel.

Bronfman, who bought control of Israel Discount Bank earlier this year, will pay Co-Op NIS 164 million. Bronfman will also pick up 5 percent of Ikea from the heirs of Albert Gnat, who hold 25 percent.

The heirs have the option to sell all their holdings at the same price within 90 days.

The appointed Co-Op board petitioned the court several days ago to approve the deal, which represents a 30 percent premium over its recent NIS 120-133 million valuation.

Sources close to the chain said that Bronfman's representatives are in advanced stages of negotiations with Ikea CEO Shlomi Gabbai and other executives to sign long-term contracts.

"I have complete faith in company management, which has led Ikea to become a leading brand," Bronfman said. "I have no plans to implement structural changes in the company."

Another executive indicated that Bronfman's group intends to open an additional branch in the country.

Beyond selling the Ikea concession, all that is left for the Co-Op Society to do is to sell its last properties at Dizengoff Center, valued at NIS 100 million. Between the final deals, Co-Op will be able to complete its distribution to shareholders, estimated to be NIS 55,000-NIS 60,000 per share.