Seven Brothers' Family Deal Over Supermarket Stake Draws Regulator Pushback

Brothers Ilan and Shai Sheva, who control fruit-and-vegetable marketer Bikkurei HaSadeh, are buying out their brother-in-law Raphael Steinberg’s 10% stake in supermarket chain Shuk Ha'ir for 17.24 million shekels, valuing the chain at 172 million shekels. Bikkurei HaSadeh already owns 90% of Shuk Ha'ir and will become the sole owner once the deal closes. Steinberg, the chain’s CEO, is expected to leave his post.

The company did not bring the deal to a general shareholders’ meeting, arguing that it was conducted at market terms and based on an external valuation, so it was not a “special transaction” under Israeli company law. Bikkurei HaSadeh relied on a legal opinion from Prof. Asaf Ekstein of the Hebrew University, who supported that view and said the Seven brothers themselves had no personal interest in the transaction, only their brother-in-law did. He also noted that the deal amount is far below 5% of Bikkurei HaSadeh’s market value, which he put at about 587 million shekels.

The Israel Securities Authority rejected that interpretation and said the transaction must be approved by shareholders because a controlling shareholder’s relative is selling an asset to a company they control. The regulator also challenged the claim that a valuation proves market terms, saying the report, prepared by BDO and based mainly on DCF projections, does not reflect an arm’s-length price. It demanded that the company disclose its position publicly and submit the deal for approval. The dispute could lead to a derivative lawsuit and a court ruling.

The audit committee, which includes Michal Patal-Kamai, Udi Erez and Avraham Dadon, approved the transaction after questioning Ekstein and BDO, concluding it was not special and did not require a general meeting. The committee said that even if the brothers had a personal interest, the deal would still be ordinary business, on market terms, and not materially harmful to profitability. Under the company’s bylaws, audit committee approval is enough in such cases.

Ekstein’s filing added that Shuk Ha'ir turned from profit into modest losses in the second half of 2025, prompting an efficiency plan, and that full ownership would help Bikkurei HaSadeh implement it. He also said Steinberg tried to persuade BDO to value the company at 210 million shekels, but the deal was ultimately struck at a lower price, payable in 12 equal monthly installments. The brothers’ sister has no joint business with them except co-ownership of land leased to them for about 215,000 shekels a year.