The boards of directors of Alon Israel Oil Company Ltd. and its subsidiary, Alon Holdings Blue Square - Israel Ltd. (NYSE: BSI; TASE: BSI) (which owns the Mega retail chain) have approved the Mega debt arrangement and the obligations the companies will assume under the arrangement.
Alon Israel Oil, controlled by Shraga Biran and the kibbutzim's buyers' organizations, has also decided to put its 72% controlling interest in another Alon Holdings Blue Square subsidiary up for sale: gas stations company Dor Alon Energy in Israel (1988) Ltd. (TASE: DRAL), which has a NIS 350 million market cap. The sale of these shares can help save the Mega chain.
Dor Alon Energy has 212 gas stations, 144 convenience stores located in gas stations under the Alonit brand, 46 stores in greater Tel Aviv cities under the AM:PM brand name, and 29 more Alonit branches located outside of gas stations.
Alon Israel Oil owned Dor Alon Energy up until 2010, when a parties at interest deal was approved in which Alon Holdings Blue Square acquired the Dor Alon Energy shares from its parent company in a share allocation deal, reflecting a NIS 900 million company value for Dor Alon Energy (a 25% premium on the share price at the time).
Following this deal, Alon Israel Oil increased its holdings in Alon Holdings Blue Square to 80%. After the deal was completed, Alon Holdings Blue Square quickly distributed a special NIS 800 million dividend, mostly to Alon Israel Oil, which required court approval.
Two other gas station companies currently up for sale are Sonol Israel Ltd,, owned by Azrieli Group Ltd. (TASE: AZRG), and Ten Petroleum Company Ltd. (TASE: TNPT.B1), controlled by Eliezer Fishman. Several concerns have negotiated in recent years for the acquisition of these companies, but no deals have yet been completed. Competition for potential buyers is therefore likely to make it difficult for Alon Holdings Blue Square to obtain a substantial premium on its Dor Alon Energy stake.
Published by Globes [online], Israel business news - www.globes-online.com - on July 20, 2015
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