Carrefour Israel Moves Closer to Stock Exchange Listing

Carrefour Israel is taking a significant step towards a public offering, with France Israel Group, the operator of the Carrefour chain in Israel, submitting a preliminary prospectus draft to the Securities Authority. This filing, based on financial reports for the second quarter of 2026, paves the way for a potential IPO and listing of the company's shares on the Tel Aviv Stock Exchange.

Electra Consumer Products, which holds approximately 49.5% of France Israel Group, is also considering a partial sale of its shares. This move is driven not only by the desire for capital but also by the structure of the Elco group and the Concentration Law, which aims to limit economic concentration. Making Carrefour a separate public entity under Electra Consumer Products could create an additional public layer in Elco's pyramid structure. Previous plans explored Electra Consumer Products reducing its stake to around 24.9% through dilution and a sale, to avoid continued control post-IPO. Another considered alternative was distributing Carrefour shares as a dividend in kind, but the current filing explicitly mentions the possibility of a share sale.

The valuation for the IPO remains a key question, as the prospectus draft does not guarantee the offering's completion or set a specific valuation. Reports from July indicated an intention to pursue an IPO at a valuation of approximately NIS 900 million and raise about NIS 350 million through shares and bonds, with The Phoenix Underwriting and IBI leading the process. The funds were intended to strengthen the capital structure and reduce financing burdens.

Carrefour's recent financial performance shows mixed results. While profitability is improving, sales have seen a slight decline. In the second quarter, food retail sales were NIS 818 million, a 2.6% decrease from the previous year, with same-store sales down 7.2%. This decline is attributed to factors including the timing of the Passover holiday, store sales, and the impact of the "Israel Basket" program, which increased customer numbers but reduced gross profit margins. However, the sector's profitability improved, with a sector profit of approximately NIS 44 million and EBITDA (excluding IFRS 16) rising to NIS 38 million. Global Retail reported an operating profit of about NIS 42 million and a net profit of NIS 8 million.

For the first half of the year, food retail revenue increased by 2.4% to approximately NIS 1.68 billion, with EBITDA (excluding IFRS 16) at NIS 76 million, up from NIS 66 million. As of June, the group operated 145 directly managed stores. Investors will need to weigh the improved profitability against the declining same-store sales when determining the company's valuation. Zvika Shwimmer, CEO of Electra Consumer Products, stated that the prospectus filing is a "significant milestone" in their strategic plan.