Self-made Israeli tycoon Mordechay “Moti” Maurice Ben-Moshe, is set to acquire control of Alon Blue Square Israel Ltd. (NYSE:BSI, TASE:BSI) with the approval of 99% of the company’s Series C bondholders, who accepted his offer for a 72.71% direct and indirect interest in the company held by Alon Israel Oil Company Ltd. for NIS 115 million ($29 million).
The transaction includes receipt of all rights derived from a NIS 110 million loan, and a NIS 60 million subordinate loan, that Alon Oil granted to the company. A competing offer by Gindi Israel 2010 Ltd. was declined by the bondholders.
Ben Moshe further offered an immediate NIS 600 million cash injection into the company, and the immediate payoff of NIS 300 million of the company’s NIS 932 million debt. A sale of a controlling stake in Alon Blue Square would pave the way for a debt agreement as it would nearly guarantee that creditors would receive all their money. The company owes NIS 380 million to bondholders and NIS 552 million to a group of banks, said Haaretz contributor Yoram Gabison.
However, Series A bondholders of Alon Israel, a creditor of subsidiary Mega, Israel’s second-largest supermarket chain, object to the deal, according to Gabison.
“The representatives, trustee and bondholders worked strenuously over the recent period to bring before the bondholders the best alternative and opposed activities by various bodies to sabotage bondholders rights,” said the bondholders in a statement.
The company also announced that the NYSE has accepted the company’s plan to regain compliance with the NYSE’s Continued Listing Standards and granted the company 18 months from October 1, 2015, the original notification date, to demonstrate compliance.
Alon Blue Square Israel Ltd. operates as a retail company in Israel. The company was formerly known as Alon Holdings Blue Square Israel Ltd. and changed its name to Alon Blue Square Israel Ltd. in April 2013. The company was founded in 1988 and is based in Yakum, Israel. Alon Blue Square Israel Ltd. operates as a subsidiary of Alon Israel Oil Company Ltd.
Its Fueling and Commercial Sites segment develops, constructs, and operates vehicle fueling stations, adjacent commercial centers, and independent convenience stores; markets fuel and other products through filling stations and convenience stores; and directly markets distillates to customers. Its TASE traded 63.13% subsidiary Dor Alon Energy Israel (1988) Ltd., is one of the four largest fuel retail companies in Israel operating 209 fueling stations. It is also a leader in the field of Israeli convenience stores, operating a chain of 211 petrol stations and 220 convenience stores in different formats under the Alonit and Super Alonit, and AM:PM names.
The company’s Supermarkets segment offers various food and beverage products; non-food items, such as house wares, toys, small electrical appliances, computers and computer accessories, entertainment and leisure products, and textile products; and near-food products comprising health and beauty aids, products for infants, cosmetics, and hygiene products. This segment operates 197 supermarkets under the You, ZolBeShefa, You Neighborhood Store, Mega, Mega in Town, and Eden Teva brands. Its subsidiary, Mega Retail Ltd., currently operates 127 supermarkets through court-appointed trustees.
Its Houseware and Textile segment operates as a retailer and wholesaler in houseware and textile activities. This segment operates 112 stores through its TASE traded 77.51% subsidiary, Na’aman Group (NV) Ltd., under the Naaman and Vardinon brands.
The company’s Real Estate segment owns, leases, and develops commercial centers, logistics centers and offices, and land, as well as develops income producing commercial properties and projects, including wholesale market residency projects in Tel-Aviv through its TASE traded 53.92% subsidiary Blue Square Real Estate Ltd.
Alon Blue Square Israel Ltd. is also involved in the cellular mobile virtual network operator activities, as well as issuance and clearance of credit card activities.
Ben-Moshe is the founder and chairman of the Extra Group, based in Cologne, Germany. In 2014, Ben-Moshe acting in partnership with Argentine tycoon Eduardo Elsztain, acquired joint control of Israel’s biggest conglomerate IDB Group through a massive capital injection, after a heated battle with bondholders and previous controlling shareholder Nochi Dankner. In May 2015 he was forced out as co-chairman of IDB. In 2007 he started a private equity fund together with Dr. Barnim Jeschke, in order to invest in new technologies, focusing initially on the renewable energy sector. Between 2003-2007 he built a leading VoIP based network in Europe, in partnership with Telefonica Deutschland GmbH, and in cooperation with Cisco. In earlier years, after dropping out of Bar-Ilan University, he founded Cyber Gate, a software development company which developed billing systems and micropayment solutions, writing the computer program himself.