Last-Minute Offer Adds a Twist to Hapag-Lloyd's Acquisition of Zim
A competing bid is the latest twist in the saga of Hapag-Lloyd's planned takeover of Israeli shipping line Zim - even though Zim's shareholders have already approved Hapag's offer. An Israeli businessman, Haim Sakal, has reportedly offered $4.5 billion in cash for all of ZIM, about $300 million more than the joint offer from Hapag-Lloyd and the Israeli investment fund FIMI. The new offer includes a $250 million employee bonus and a promise of continued Israeli control of the Zim fleet, which is a national-security asset and an icon of the nation's development.
The news caused a sudden 10-percent jump in Zim's stock price, but it is unclear whether Zim could legally accept Sakal's bid at this point in time. "ZIM's board of directors has signed a binding agreement to merge ZIM with the Hapag-Lloyd shipping company, and the agreement was approved by a majority of 97% of the shareholders last week. The deal is binding on the company," the firm's board said in a statement. The binding agreement does have an expiration date for completing the acquisition, but that would be a long ways off, and Zim's board could pursue an extension.
It is also unclear where Sakal - a member of a prominent family of Israeli importers and retailers - would obtain the funds for such a large purchase, and who his partners might be. However, the workers committee (union) for Zim told Israeli business outlet Globes that the offer was welcome as an "Israeli alternative" to the sale of the majority of the company to a foreign entity.
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State approval of the deal is still pending, and will be required for the Hapag sale to go forward: the Israeli government holds a "golden share" allowing it to protect national-defense interests in Israel's only ocean carrier.
The workers committee's concern that the Hapag-FIMI ownership structure would be "less Israeli" is disputed. FIMI's director, investor Ishay Davidi, says that a smaller core fleet pulled out of Zim could serve Israeli interests well, and would be more "Israeli-owned" than the current company. Zim is currently traded on a public exchange in New York and has no controlling shareholder. In theory, it could be bought out by a hostile party, he told a Knesset committee earlier this year.
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