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Tnuva planning massive NIS 9-10 billion IPO in 2022

CM 01/09/2021

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Israeli food producer Tnuva is planning a massive IPO on the Tel Aviv Stock Exchange in the coming year, at a valuation of NIS 9-10 billion after the value of the company has increased in recent years.
A share offering of that size would represent a huge turnaround for the company. In 2015, Chinese multi-national food giant Bright Food acquired 76.7% of Tnuva at a valuation of some NIS 8.6 b. However, it lost as much as 40% of its value over the next 18 months as its market share dropped and debts accumulated.
Since then, the company has been growing quickly, led by CEO Eyal Malis and chairman Haim Gavrieli. Tnuva has made significant investments in product innovation, including upgrading the company’s manufacturing equipment and machinery. The company also implemented a comprehensive streamlining process that included laying off hundreds of workers.

Those improvements, as well as high stock market valuations, have set the stage for a successful IPO, Tnuva executives believe. The company’s main competitor, Strauss Group, now trades on the Tel Aviv Stock Exchange at a market cap of NIS 10.7b.
On Wednesday, Tnuva announced that it had signed an agreement with the Migros Group, the largest food retailer in Switzerland, to license its technology for the production of soy-based milk substitutes. The deal, valued at tens of millions of euros, represents the first time Tnuva is licensing its brand name outside Israel, a new part of the company’s growth strategy.
The IPO comes amid a disagreement between Bright Food and a group of kibbutzim that own the remaining 23.3% of the company.
Last week, Bright Food rejected an external offer to acquire the company. Even before the proposal, Bright Food said it would try to buy the share of the company that belongs to the kibbutzim instead.
The kibbutzim want to sell their entire stake in Tnuva in order to avoid the legal requirements for related parties transactions within public companies, which would require them to disclose all future interactions with Bright Food. That means they would likely want to sell all of their shares during the IPO. Bright Food, meanwhile, would prefer that the shares be sold in proportion to each party’s relative holdings in the company.
A Tnuva truck enters the company's logistic centre in the southern town of Kiryat Malachi, Israel May 22, 2014. (credit: REUTERS/AMIR COHEN/FILE PHOTO)A Tnuva truck enters the company’s logistic centre in the southern town of Kiryat Malachi, Israel May 22, 2014. (credit: REUTERS/AMIR COHEN/FILE PHOTO)
The kibbutzim would stand to earn much more selling their shares in a public offering than if the company was sold in a private deal.
Gavrieli, in the meantime, has been speaking with different banks about conducting the offering, confident that the kibbutzim will come around once the process starts.

Source: Jerusalem Post

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