Electra Consumer Products is paying out NIS. 143 million for 35.5% of the food chain’s shares and a further NIS. 50 million to the Bitan family in return for the directors majority on its board
05 May 2021 08:22 Nurit Kadosh
Tags: Electra Consumer Products Yeinot Bitan Nahum Bitan
Days after the court rejected Yigal Demri’s request for an injunction, Electra Consumer Products and Yeinot Bitan signed their agreement. Subject to the predetermined conditions set by the parties, the transaction’s completion sees Electra holding 35.5% of the share capital in Yeinot Bitan in return for NIS. 143m, and will pay the Bitan family an additional NIS. 50m. Simultaneously, Phoenix will invest a 15% allocation against the chain’s share capital.
The transaction reflects the NIS. 400 million value for Yeinot Bitan chain’s 150 branches. Phoenix is expected to remit some NIS. 60 million to Yeinot Bitan for its part of the deal on the transaction’s completion date. Electra Consumer Products will be entitled to the majority of directors seats in Yeinot Bitan’s board, and will take over the company’s ongoing management decisions. Phoenix and Bitan family members will be represented on the board and hold veto powers as normative for minority share holders.
Yeinot Bitan’s remaining shares on completion of the deal will be held by the family and third parties, with options for realizing the shares which were primarily granted to banks.
The agreement determines mechanisms for adjusting the parties’ holding percentages in Yeinot Bitan shares should the company or any of its other shareholders acquire the options, but in any event the portion held by Phoenix will not be lower than its predetermined quantity.
A further determination with regard to completion of the transaction sees Electra Consumer Products placing a NIS. 50 million loan bearing 6% annual interest at the disposal of Yeinot Bitan. It will be redeemed in quarterly payments over a 4 year period, starting from 24 months after the transaction completion date.
Electra Consumer Products is entitled to receive annual management fees from Yeinot Bitan to the tune of some NIS. 11 million, from which sum it will transfer some NIS. 5.5 million annually to the Bitan family for a 10 year period. However, this transfer will cease in December 2023 if Bitan realizes the option to acquire additional shares based on the agreement’s conditions.
Among the agreement’s conditions are the requirement to receive approval from the Commissioner of Competition and from banking corporations. The parties involved seek completion by May this year. Electra is examining various transaction focused financing options, among them leveraging its own independent sources or existing lines of credit.
Nahum Bitan Photography: Zvika Tischler, Amit Shaal