The summons to the hearing of the new Shufersal CEO Ofer Bloch, apparently, not only does not surprise the institutional bodies – but is welcomed by some. Therefore, for the return of the dominant CEO Itzik Aberkhan to the position of chairman.
● Without a golden parachute: What will Ofer Bloch receive after his removal from the position of CEO of Shufersal
Bloch, who arrived with no experience in retail management after serving as CEO of the Electric Company, was appointed in May by former chairman Yaki and Damani, who previously served as CEO of Electra Consumer Products. By the institutional bodies, in fact, those large investment bodies that led to the appointment and Damani a year and a half ago, were disappointed – and eventually led to his departure.
Shufersal is de facto controlled by a body of six large institutional bodies. Altshuler Shaham with the insurance groups, Migdal, Menora Mivtachim, Clal, Harel and Phoenix, each hold about 10% of the share capital, and together a share of about 60%.
“The institutions expected Shiki and Damani to know how to work alongside Aberkhan,” says a veteran source in the capital market. “They did not think Bloch was suitable for the position. He does not come from this field, and he is also an appointment of the previous chairman. The whole market knew the nature of the relationship between Abercrombie and Wadmani. “No one is surprised, and some of the institutionalists are also happy that things are going according to their intentions.”
Yaki and Damani, Chairman of Shufersal / Photo: Yonatan Blum
The stock has fallen 11% since the beginning of the year
Many upheavals that a prominent company like Shufersal goes through are not a healthy thing, but despite the state of the administrative backbone – stock Shufersal Traded on Sunday with an increase of 1.4%, at a price that embodies a market value of NIS 6 billion. In the past month, the stock has been trading in volatility, with a decrease of 0.5% overall. Since the beginning of the year, Shufersal has recorded a negative return of 11%, while since the last peak in February – the share has fallen by about 25%.
The positive trend in Shufersal’s stock on Sunday, despite the problematic situation in the company’s management, comes against the background of market assessments that the exchange of roles at Shufersal has already taken place, and it seems that most of the storm in the capital market is behind us. Investors in the stock market are apparently entering a waiting position and waiting for the next developments, when in the main – how will I now bless the company down the road?
“We see that since Dudu Zabida became the dominant CEO of a building-producing real estate company, which also operates without a core of control, there are executives who want to make a kind of ‘takeover’ of public companies,” says the senior capital market official. “A similar situation happened at Paz, when Nir Stern became centralized CEO, and instead of the Freshmarket chain buying Paz, the opposite scenario happened. Wadmani also wanted to become a more central figure, while in his time the company also promoted an acquisition that was considered expensive by the institutions, of the ALM electrical products chain.
Centralized executives tend to promote themselves a generous salary
However, centralized executives are not necessarily good news for public companies, as they tend to promote themselves a generous salary, accompanied by options, and not one of them promotes acquisitions of high-value companies. The same source in the capital market believes that institutional investors do not have many alternatives when they do not have central control. “What can they do? This job should have a stray cat who knows all the details. Bloch was a talented manager in dominant bodies like the power company, but not in a writers’ network. Institutionalists can shake such a ship, in this way, just because it has no controlling shareholder.”
A source in another institutional entity, which is invested in Shufersal shares, believes that the current situation that will lead to the appointment of a replacement for Bloch, in the end, may be positive. “Institutionalists see the return of Abercrombie as something positive that comes to stabilize the ship. In the first quarter of the year, all retailers recorded a quarter that was negatively affected by the timing of Passover, and especially back to the end of the Corona days. According to the same source, there is a need to strengthen the managerial backbone, beyond the CEO. I think there was a kind of institutional ‘activism’ here, which led to the current situation. “
It seems that the return of Chairman Aberhahn, even if it did not surprise the institutionalists and even occurred with their encouragement, also stems from the lack of a controlling shareholder.