“Since Delek Israel operates hundreds of branches and stores on Saturdays and Israeli holidays, past experience in competing retail chains shows that a deviation from this principle may even lead to economic damage to the company’s food retail business, which is its core business,” Shufersal’s external directors wrote in their reasoning. At the same time, the effect of the uncertainty created by the introduction of electric vehicles into Israel may put Shufersal, in the opinion of the directors, in a partnership that does not comply with the company’s strategy and its risk policy.
Shi Klein 14.04.2022
The Shufersal board of directors – which owns Yesh Chesed and the supermarket chain Good Haredi – Good Market – rejected the fuel offer to merge and purchase shares in the company. According to the company’s announcement, the company’s board of directors has decided that the offer is not in the company’s favor and does not comply with the strategy of Shufersal and its shareholders.
On April 5, 2022, Delek Israel submitted a letter on behalf of all the shareholders in the company, to carry out a merger transaction by exchanging shares with the company and immediately thereafter purchasing additional shares of the company. The offer is valid until 14.4.22.
In order to neutralize any potential conflicts of interest of the directors of the company, the company’s board of directors authorized the four external directors to examine the proposal and bring it its recommendations.
The Company’s Board of Directors has, as stated, adopted the Committee’s recommendations to reject the proposal. Here are the reasons:
The company’s strategy and vision have always been that its retail activities will suit the nature and shades of Israeli society as much as possible and will not hurt the feelings of a particular public. Beyond not adapting to this strategy, since Delek Israel operates hundreds of branches and stores on Saturdays and Israeli holidays, past experience in competing retail chains shows that deviating from this principle may even lead to economic harm to the company’s food retail business, which is its core business.
Given that there is a great deal of uncertainty in the industry in which Delek Israel operates, including due to the increase in the use of electric vehicles, as well as the wholesale activity that has no launch points with the company’s core business, there is great doubt about the added value of these activities. To the company and therefore does not conform to the company’s strategy.
Delek Israel’s activities include significant risks, as described in detail in the draft prospectus for the supplement published by Delek Israel, which do not comply with the company’s risk policy at this time.
According to the offer, the exchange ratio will be determined according to valuations made to the Company and Delek Israel and the offer did not include any reference to the payment of any premium (even for a material effect on Delek Israel shareholders), although the merger will result in Delek Israel shareholders immediately after the transaction. The largest shareholders in the company with a holding rate of about 20%. In light of the trends in the fuel industry as described above, it seems that the benefits of the merger for the bidders – that is, Delek Israel shareholders – outweigh the benefits of the merger with the company, a fact that should have been taken into account in the exchange ratio and in return for a share.
In light of all the above, the Company’s Board of Directors has decided that the offer is not in favor of the Company and its shareholders and accordingly has decided to reject the offer in its current format and timing.
The company thanks Delek Israel for their application and wishes them great success along the way.