Arkia Control Battle Sees Dramatic Twist in $45 Million Deal
Translated & summarized from Ice by baba
Employees of the Israeli airline Arkia have three days to submit a competing offer to acquire the company, following a dramatic twist in negotiations. A purchasing group led by Yariv Lerner, Kidyan Dahari, Yaron Adib, and Einav Adib-Berrer had reached a deal with the Nakash brothers for approximately $45 million. The airline is facing significant financial losses, estimated between $50 million and $60 million for the year, and has seen employee protests and labor disputes.
The story in 5 lines · by baba
- Arkia employees have until Monday afternoon to present a competing offer for the airline.
- A deal with the Nakash brothers and a purchasing group is valued at approximately $45 million.
- Yariv Lerner, initially allied with employees, joined a rival purchasing group.
- Arkia faces estimated losses of $50-60 million for the year.
- Employees have protested share dilution and union declared a labor dispute.
The intense competition for control of the Israeli airline Arkia has reached a critical juncture, with employees now having a three-day window to present a competing offer. This follows a lengthy negotiation session that concluded early Friday morning between the workers' union, "Tot" (Tot HaOvdim), and a purchasing group led by Yariv Lerner, Kidyan Dahari, Yaron Adib, and Einav Adib-Berrer. The employees' union is actively meeting with potential investors to secure a counter-offer by Monday afternoon, aiming to acquire the airline with their chosen investor.
The deal previously agreed upon with the Nakash brothers involves a total investment of approximately $45 million. The purchasing group would inject $30 million for control, while the remaining funds would come from the Nakash brothers (Rafi, Joe, and Avi) and the state. Under this arrangement, the Nakash brothers would retain a 3% stake, but the fate of the 22% held by employees through "Tot" remains uncertain.
The emotional negotiations were fueled by a surprising shift: Yariv Lerner was initially part of a group exploring a joint purchase with the employees, alongside the Varour family and Avi Elkiaim. However, Dahari and Yaron Adib, owners of real estate firms Yeshpro and Tanoport, negotiated separately with Avi Hurumro, who represented the Nakash brothers in the sale. Lerner ultimately joined forces with Dahari, Adib, and Adib-Berrer, a medical center owner, leaving the employee representatives facing a group they had previously considered partners.
This dramatic development unfolds against a backdrop of severe financial distress for Arkia. The company is estimated to have lost around $30 million in the first three quarters of the year and could end it with losses between $50 million and $60 million. Last week, dozens of employees protested against a dilution of their share ownership. The Transport Workers Union also declared a labor dispute, citing unilateral layoffs and route cancellations.
Even if a competing bid is not submitted by Monday, negotiations with the current purchasing group are expected to continue, with an insider suggesting an agreement is likely.
Mentioned
