ISRAEL: Willi-Food founders give up majority stake
G-Willi Food founders have announced they are to sell their majority share in the business
The founders of G. Willi-Food International have decided to sell their controlling stake in the vehicle that controls the Israeli food group to local tech firm Emblaze.
Brothers Joseph and Zwi Williger have signed a deal to sell 58% of Willi Investments, which in turn owns 58% of G. Willi-Food.
London-listed Emblaze, which is controlled by Ukrainian businessman Alexander Granovsky, has agreed to pay NIS268m for that shareholding.
Under Israeli corporate law, the deal will also see a special tender offer for shares in Willi Investments held by the public.
When that offer is completed, Emblaze could own up to 61.8% of Willi Investments. A stake of that size would see Emblaze pay NIS285.5m.
The Williger brothers will continue to work for the business. Joseph and Zwi could take the roles of president and chairman respectively, or both be joint CEOs.
Zwi Williger said: "We view the sale of control of Willi-Food Investments to Emblaze ... as an opportunity for the company to continue its accelerated development in the food sector, both in Israel and outside Israel and even to expand into additional activities.
"My brother, Joseph, and I ... will continue to work together with the company's personnel and the management of Emblaze in order to continue to develop the company's business, both in its existing business areas as well as additional business areas."
G. Willi-Food International Ltd. (NASDAQ: WILC) (the "Company") announced that on March 2, 2014, the controlling shareholders of Willi-Food Investments Ltd. ("Willi Investments"), the controlling shareholder of the Company, signed an agreement with Emblaze Ltd, a company listed on the London Stock Exchange ("Emblaze") (the "Agreement"), to sell their controlling stake (58%) in Willi Investments, subject to the satisfaction of the condition precedent and the additional terms described in the Agreement (the "Transaction"). The Agreement was signed byZwi Williger ("ZW") and Joseph Williger ("JW" and, together with ZW, the "Sellers") to sell up to their entire interests in Willi Investments. Willi Investments owns approximately 58% of the Company's shares (the Company together with Willi Investments, "Willi-Food"). The Agreement also governs the ongoing relationship of Emblaze with the Sellers both before and after completion of the Transaction.
The Transaction is subject to the receipt of Israeli Anti-Trust Authority's approval.
Under the terms of the Agreement, ZW and JW will be required to continue to be engaged by the Company and serve as chairman of the board (in respect of ZW) and as president (in respect of JW), or as joint chief executive officers of Willi-Food for an additional period, commencing upon expiration of ZW and JW's current service agreements with the Company (September, 2014) of between 18 months (if their service agreements are not re-approved at the next Company shareholders' annual general meeting) and three years from completion of the Transaction (if their service agreements are re-approved at the next Company shareholders' annual general meeting), subject to certain exceptions in the Agreement. Following such engagement period, ZW and JW have the option to continue to manage the Company as they have done. If, however, either ZW or JW chooses to leave the Company within six years from completion of the Transaction, they will be prohibited from competing against the Company in any material way, subject to certain agreed exceptions, in consideration of an additional annual payment of NIS 1,500,000 (approximately $430 thousand) per year from Emblaze to each Seller following termination of their engagement.
The Transaction is expected to be completed soon after the successful completion of a special tender offer addressed to the shareholders of Willi Investments, pursuant to the Israeli Companies Law, or, alternatively, following its lapse, although there is no guarantee that the Transaction will be completed. Completion is expected to occur sometime during the second quarter of 2014.
The aggregate consideration for the shares in Willi Investments to be acquired from the Sellers (including the shares of the Sellers tendered by the Sellers in connection with the special tender offer, if completed) is approximately NIS 268,000,000(approximately $76,600 thousand). The consideration to be offered to Willi Investment's shareholders as part of the special tender offer represents the same price per share as would be paid to the Sellers for their shares in Willi Investments, and is expected to be, in aggregate, approximately NIS 23,000,000 (approximately $6,600 thousand).
Assuming, therefore, that all the shareholders of Willi Investments other than the Seller participate in the special tender offer in relation to their entire shareholdings, then Emblaze expects to acquire up to 61.80% (though the actual number may be lower, depending on the breakdown of shareholder acceptances under the Special Tender Offer) of the shares in Willi Investments for an aggregate consideration of approximately up to NIS 285,500,000 (approximately $81,600 thousand).
Following completion of the Transaction, Emblaze will assert control over Willi Investments by means of (i) its ability to exercise control of between 44.99% and 61.80% of the votes exercisable at shareholder meetings of Willi Investments and (ii) its right to appoint the majority of board members of Willi Investments and the Company upon completion of the Transaction.
Zwi Williger, Chairman of Willi-Food commented: "We view the sale of control of Willi-Food Investments to Emblaze, traded on the London Stock Exchange, as an opportunity for the Company to continue its accelerated development in the food sector, both in Israel and outside Israel and even to expand into additional activities. My brother, Joseph, and I, have responded to the request of Emblaze to continue to manage the Company. We will continue to work together with the Company's personnel and the management of Emblaze in order to continue to develop the company's business, both in its existing business areas as well as additional business areas."
Original source: G. Willi-Food International
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