Tiv Taam Sale Officially Called Off

It's official: the Tiv Taam deal is off, and businessman Arcadi Gaydamak is not going to buy controlling interest in the supermarket chain. He is, however, going to buy a 10 percent stake in Enter Holdings, controlled by Amit Berger, for NIS 30 million.

Despite all that was written about the deal, the millions of dollars involved and the dreams - everything went down the drain yesterday when the supermarket chain notified the Tel Aviv Stock Exchange that the deal was off.

Upon returning from a trip to Russia, Gaydamak insisted on cutting the price for controlling interest in the retail chain by $10 million. Controlling shareholder Kobi Tribitch refused and the takeover was called off. Tribitch will receive $2 million of the sums that Gaydamak has already paid.

Sources involved in the deal claimed that the main reason Gaydamak changed his mind about buying the non-kosher chain was that the deal is more complicated than originally thought. In addition, he realized he would not be able to realize his dream of transforming it into a kosher chain that would appeal to everybody.

The technical reason for the deal falling through is that the mediator, Ronny Mana, apparently demanded a $10 million fee, which Gaydamak refused to shoulder.

Tiv Taam said that Gaydamak would be buying into Enter rather than make a $20 million payment that he owed for canceling the deal, according to the original contract.

The stock market responded to the announcement by sending Tiv Taam shares down 11 percent until trading in the stock was halted.

Ten days ago, Tiv Taam announced that Gaydamak would buy 51 percent controlling interest in the firm at a company valuation of NIS 820 million, about 80 percent above its market capitalization on the Tel Aviv Stock Exchange at that point.

Gaydamak then set the entire nation abuzz by announcing that the country's leading non-kosher supermarket chain would stop selling pork products. Tiv Taam quickly released an announcement that it would stop selling pork products if its board and management were convinced that it made sense from a business perspective.

The billionaire also said he aimed to double the chain's turnover within two years, during which time he would open another 100 outlets.

Gaydamak had closed the deal to buy Tiv Taam within hours. At the time, he may not have fully grasped the complexity of the group and its operations, which not only markets non-kosher products, but also produces and imports them. Tiv Taam owns 75 percent of the Mizra meat processing company, which owns a non-kosher slaughterhouse for chickens, a fish plant in Jaffa, and a sweeping import business.

Another of Tiv Taam's strongest points is its unique customer experience.

Enter Holdings, which co-owns Tiv Taam, sought to override rumors sweeping the marketplace of trouble between the deal makers, and said just a few days ago that the deal was proceeding well and was close to being closed once all the necessary permits were in place.

Eli Shitzer adds: The Gaydamak Index fell 6.5 percent on yesterday's news, with all of his companies suffering serious losses.

TheMarker launched the Gaydamak Index to track the four companies he bought, or had agreed to buy, over the last month.

Tiv Taam lost 11 percent, Gilon Investments was down 5.7 percent and real estate company Ocif, the largest of the bunch, lost 5.4 percent.

Petro Group, which operates gas stations and convenience stores in the United States, lost 3.6 percent.