Shufersal, the largest retail company in Israel, has recently undergone upheavals, intrigues and other elements of a good telenovela. Chairman dismissed, ego quarrels between CEO and chairman. Chairman trying to promote a deal, threats from shareholders not to accept the deal and an outside board of directors deciding not to accept the deal and killing the messenger – the chairman. This is just part of events The previous episodes and it is not over yet.
This apparent managerial chaos is supposed to affect the company and the company’s stock. But the actual situation is 180% different. Shufersal shares are rising and yesterday they touched an all-time high. The retail giant is going through ups and downs on the managerial avenue, but as long as the cashiers are ticking, business is as usual. Moreover, there is a chance of a kind of struggle for control or bringing in a factor with a premium for the company or real estate activity, so the market is enthusiastic. It should be mentioned that Shufersal is a giant in the field, but it receives a premium To 20, although when referring to real estate activity separately, you get a lower relevant multiplier of 17-18.
The situation at Shufersal reminds us of a statement by investment guru Warren Buffett – “A good company can be run by your idiot nephew”. Buffett added that he prefers to invest in companies that can be run by stupid people. That is, when the business is strong management is less critical to its success. Shufersal’s business is strong and with all due respect to the management and especially to the previous CEO, Itzik Aberkhan, the credit for success at Shufersal is mainly for the business itself and the employees in the business. For Warren Buffett’s investment rules – important
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Summary of previous chapters
Recently, there has been unrest in the company’s board of directors headed by Yaki and Damani over Aberkhan’s performance, and tensions have begun that eventually led to Aberkhan’s resignation. Along with Abercrombie, other middle-level executives left, some for Electra Consumer, which entered the retail sector through the acquisition of the Bitan wine chain. Instead, Aberhahn was appointed CEO of the company, Ofer Bloch, who has not yet taken up the position.
Abercrombie did not leave the company in good spirits, and it is clear that the tensions with the members of the board, and especially with the chairman, continue. He refused to attend a farewell meeting of the board to which he was invited, and remarks made by people close to him and Damni spoke of “Shufersal did not take off” under Aberkhan’s leadership.
Abercrombie behind the scenes began trying to formulate an acquisition core to take over the company. The Carasso family and others were interested in the goal of taking over the company, which is run without a nucleus of control, and appointing Aberkhan himself as chairman instead of his rival and Damani. Other allegations against Wadmani are about his conduct as acting director, in the absence of one such until the appointment of the designated CEO, Ofer Bloch.
This pressure and especially Wadmani’s attempt to push a deal in which Delek Israel merges with Shufersal, a deal that the major shareholders – Phoenix and Keren Sifra opposed – led to the establishment of a committee of foreigners who eventually recommended the dismissal of Wadmani, who decided to resign immediately. Temporary Ran Gottfried. Managerial chaos.
Managerial chaos is supposed to scare investors. As stated this is not the case here. Beyond the fact that in a good business no matter who the CEO is, on the day of the chairman’s resignation, the company announced Amot’s interest in the company’s real estate assets. Delek Israel offered to merge with Shufersal, and the Amir brothers, who controlled Freshmarket, even made an official offer to buy 25% of the company. That is, the offers are flowing, and the company’s real estate that has not been improved in recent years is waiting on the side for improvement.
The company’s share has risen by 14% since the beginning of the year, in contrast to the market trend and is traded at a value of NIS 7.7 billion. The market ignores the chaos, and refers to future improvements in real estate.
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