Zim Shareholders Demand Vote on New Deal Terms
Translated & summarized from Calcalist by baba
The story in 5 lines · by baba
- Zim shareholders demand a general assembly vote on any new deal.
- A group represents over 10% of Zim's stock value.
- Government Companies Authority review of original deal is complete.
- Shareholders also seek a significant dividend distribution.
- Original deal faced opposition from Israeli government bodies.
A group of shareholders representing over 10% of shipping company Zim's stock, valued at approximately $345 million, is demanding that any revised sale agreement be approved by a general assembly of shareholders. This demand follows a letter from the Government Companies Authority stating that its review of the original deal with Germany's Hapag-Lloyd and Israel's PIM is complete, and any new proposal would restart the review process.
The shareholders argue that since the Government Companies Authority has concluded its review, any new or significantly altered deal must be ratified by the shareholders' assembly, not just the company's board of directors. They believe this is especially crucial given potential changes from the original agreement and that a higher valuation for the company might be achievable in a new tender, especially considering recent increases in shipping prices due to global disruptions.
The original $4.2 billion deal for Zim, with Hapag-Lloyd and PIM, faced opposition from various Israeli government bodies, including the Ministry of Finance and the Prime Minister's office, citing concerns over PIM's reliance on Hapag-Lloyd, potential competition, and partnerships with Qatar and Saudi Arabia. The Government Companies Authority, while not approving the original plan, left the door open for a revised proposal.
Hapag-Lloyd and PIM had requested a 45-day extension to submit a new offer addressing these concerns. The shareholders also reportedly want Zim to distribute a significant portion of its nearly $2.5 billion cash reserves as a dividend, a move previously resisted by former CEO Eli Glickman.
This current shareholder activism echoes a previous effort that led to the appointment of two new directors to Zim's board. The board now faces a dilemma: fulfilling its agreement with PIM and Hapag-Lloyd, which may not allow it to oppose a revised deal that doesn't harm the company, and the shareholders' and Government Companies Authority's demand for a general assembly vote on any significant changes.
Read the original at Calcalist