Blue Square Announces Term Sheet to Aquire 51% of Outstanding Shares of Eden Briut Teva Market Ltd.
The transaction is conditioned upon receipt of all necessary regulatory approvals, including Israeli anti-trust approval, as well as the completion of due diligence examination by Blue Square.
08/08/07 Blue Square-Israel Ltd. announced that its Board of Directors had approved the signing of a term sheet, with Eden Briut Teva Market Ltd. and with Eden's shareholders, for the acquisition of 51% of the outstanding shares of Eden, a private Israeli retail company established in 2003, currently operating 2 supermarket stores, specializing in organic, natural and health food products.
The Term Sheet provides for Blue Square to acquire 51% of Eden's outstanding shares for a cash payment in the amount of NIS 22.5 million (approx. $ 5.2 million). In addition, Blue Square will provide Eden with shareholder loans in the amount of NIS 47 million (approx. $10.8 million).
Blue Square and Eden's shareholders agreed to collaborate to accelerate the development of Eden's chain of supermarkets.
The Term Sheet also provides Blue Square with the right to appoint a majority of the board of directors and a majority of the executive committee of Eden. Various significant decisions regarding Eden would require the approval of 55% of the directors (if a board approval is required) and 55% of the shareholders at a shareholders meeting (if a shareholders meeting is required). The Term Sheet also provides for Blue Square to provide all guarantees and financing required in connection with Eden's operations in the future, the repayment of existing shareholder loans in the amount of NIS 4.7 million (approx. $1.08 million) and the payment of a bonus to Eden's CEO upon the satisfaction of various thresholds. Each of Blue Square and the existing shareholders would agree to grant first refusal rights and tag along rights in connection with any proposed transfer of Eden shares in the future.
The transaction is conditioned upon receipt of all necessary regulatory approvals, including Israeli anti-trust approval, as well as the completion of due diligence examination by Blue Square. It is intended that the closing date would occur no later than 60 days from the signing of the Term Sheet, by which time it is contemplated that the parties would have signed a detailed agreement.
Due to the above conditions, there is no certainty that the transaction will actually be completed.
