Mivtach Shamir Holdings Ltd. (TASE:MISH) today confirmed last week’s report in “Globes” of the delay in the sale agreement for Tnuva Food Industries Ltd., after Chinese company Bright Food encountered difficulties in closing the deal for the acquisition of Mivtach Shamir’s stake in Tnuva. Bright Food is now seeking an addition three-month extension to complete the deal, whose original deadline was January 5.
Bright Food is having trouble paying the $458 million needed to buy the 21% Tnuva stake owned by Mivtach Shamir. Mivtach Shamir, controlled by Meir Shamir, exercised its option to join the sale of shares by Tnuva controlling shareholder Apax Partners, managed by CEO Zehavit Cohen. Bright Food has been negotiating in recent months with Meir Shamir in an attempt to persuade him to retain his share of the controlling core in Tnuva.
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Meir Shamir demanded an option to sell his holdings to the Chinese at the same value obtained by Apax, in addition to a bond to ensure exercise of the option. The Chinese company, however, declined to provide the bond, and Shamir now intends to exercise his option to join the Apax-Bright Food deal immediately. A market source did not rule out the possibility that Bright Food would decide later to provide a bond for Shamir, given its current difficulties. In any case, Bright Food has said up until now that if Shamir decides to exit Tnuva, it would bring in a partner to acquire his stake. It now turns out that the purchase of Shamir’s holding is far from settled; as of now, Bright Food has found no one. As far as is known, Bright Food will either have to find a partner to buy Mivtach Shamir’s share, or find the money to pay for it and obtain approval from the Chinese regulatory authorities for the acquisition (in addition to the 56% of the shares it is acquiring from Apax).
Apax, which is now seeing its deal with the Chinese company delayed yet again, is not expected to oppose an extension, and may even receive compensation for it. The huge deal for the sale of control in Tnuva was signed last May at a company value of $2.2 billion for Tnuva.
Published by Globes [online], Israel business news – www.globes-online.com
