ZIM Board Rejects New Review of Sale Deal by Government Authority
Translated & summarized from Globes by baba
ZIM's board of directors has told the Government Companies Authority that a revised sale proposal does not require a new discussion or approval. The authority had previously stated that any improved offer would need to be submitted as a new application. The buyers, Shaldor Lloyd and FIMI Fund, intend to submit an updated plan addressing post-deal operations, which ZIM believes does not necessitate re-approval.
The story in 5 lines · by baba
- ZIM's board rejects the Government Companies Authority's demand for a new discussion on the sale deal.
- The authority stated an improved offer would need to be a new application.
- ZIM argues an updated plan only concerns post-deal operations, not the sale itself.
- The buyers plan to submit an improved offer to address government concerns.
- The original deal was approved by shareholders but requires regulatory approvals.
The board of directors of ZIM Integrated Shipping Services has informed the Government Companies Authority that it does not need to re-discuss the company's sale deal. The authority had previously stated that if the buyers, Shaldor Lloyd and FIMI Fund, wished to submit an improved offer, they would need to file it as a new application. Roey Kahalon, Director General of the Government Companies Authority, had written to ZIM Chairman Yair Saroussi that any new application must be "complete and detailed, binding and approved by the authorized institutions of ZIM and all parties to the transaction."
However, ZIM's board responded that an updated plan from the buyers would not require approval from ZIM itself. This is because the updated plan would only address matters related to ZIM's and ZIM Israel's operations after the deal's completion, not the sale details themselves. Shaldor Lloyd and FIMI announced their $4.2 billion acquisition of ZIM in February, which includes delisting the company from the New York Stock Exchange and splitting it into two entities: the international operations becoming part of Germany's Shaldor Lloyd, and the Israeli operations, "ZIM Israel," to be held by FIMI, led by Yishai Davidi.
The deal was overwhelmingly approved by ZIM shareholders, but required various regulatory approvals, notably from the State of Israel, which holds a "golden share" in ZIM. After months of stalled discussions, the buyers recently engaged with government representatives. Following concerns raised in these discussions, the buyers announced their intention to submit an improved plan to address these issues and "strengthen Israel's maritime independence, national security, and the resilience of the supply chain system."
Despite this, the Government Companies Authority announced the end of its review process after the Ministry of Finance and Prime Minister's Office issued negative opinions on the original deal. ZIM believes that a new review by the board or shareholders is unnecessary, as the terms of the deal regarding compensation to shareholders and the company remain unchanged. The original agreement allows the buyers until June 2027 to secure regulatory approvals. ZIM is currently trading on the New York Stock Exchange at a valuation of $3.5 billion, with its share price about 17% lower than the deal price.
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