Eurasia Press & News
The dairy farmers’ bid for Tnuva Food Industries Ltd. has failed. Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) today notified the dairy farmers of the Israel Cattle Breeders Association that it would not return to the negotiating table. The dairy farmers were unable to meet the two threshold conditions Africa-Israel set for jointly acquiring Tnuva: their consent to give Africa-Israel control of Tnuva’s international activities and non-dairy activities in Israel, and proof that the Cattle Breeders Association had the support of at least 25% of Tnuva’s current shareholders for the sale of the company to Africa-Israel and the dairy farmers.
A minimum of 25% of Tnuva shareholders were needed to frustrate the proposal of Tnuva’s management to sell the controlling interest in the company to Apax Partners. A 75% majority of shareholders must vote in favor of the sale at Tnuva’s upcoming shareholders meeting in March.
The contract for the sale of the controlling interest in Tnuva to Apax is almost completed, and its already clear that Apax’s position is unchallengeable. There are two reasons for this. One is Africa-Israel’s notice to the dairy farmers. The other is last night’s meeting between Apax Partners Israel managing director Zehavit Cohen and representatives of the Cattle Breeders Association who had realized, even before Africa-Israel’s announcement, that most of the 620 kibbutz and moshav shareholders in Tnuva favored the sale to Apax as soon as possible. They fear that they will not find a buyer willing to top Apax’s offer of $1.025 billion for the company. Cohen’s intensive lobbying of kibbutz and moshav members in recent weeks persuaded them that the sale of Tnuva to Apax was worthwhile and in the interest of the company.
Sources close to the negotiations believe that representatives of Apax and the Cattle Breeders Association will meet again today to finalize details, which will enable the Cattle Breeders Association to vote in favor of the sale with an absolute majority of over 80% of Tnuva shareholders.
As things stand now, Mivtach Shamir Holdings Ltd. (TASE:MISH), controlled by chairman Meir Shamir, will not be part of the Tnuva deal. Shamir first tried to organize opposition to Apax’s proposal by creating a partnership with dairy farmers, and later proposed to Cohen a three-way partnership between Mivtach Shamir, Apax and the dairy farmers. Sources close the deal say that Apax may allow Mivtach Shamir to purchase a small stake in Tnuva.
