The Israeli shipping company Zim is set to be taken over by Hapag-Lloyd. However, the company’s Board of Directors has now received another, significantly higher offer from an Israeli investor.
The merger of Zim with the German shipping company Hapag-Lloyd is considered a done deal. Representatives of both companies signed the corresponding agreement back in February. The purchase price: $4.2 billion, or $35 per Zim share.
Recently, however, Zim’s Board of Directors received a surprise offer. Israeli businessman Haim Sakal offered a total of $4.5 billion for the shipping company – $300 million more than Hapag-Lloyd’s bid, equivalent to $37.50 per share. The proposal, which was presented to Chairman Yair Seroussi, also includes a so-called bonus pool of $250 million for the company’s employees. Sakal also pledged to keep Zim’s fleet and headquarters under Israeli ownership.
The company’s share price on Wall Street subsequently rose by 9.5%. Zim’s Board of Directors then issued a public statement confirming that the agreement with Hapag-Lloyd and private equity fund FIMI is legally binding.
“The deal is binding”
“Zim’s Board of Directors has signed a binding agreement to merge the company with Hapag-Lloyd,” the shipping company said. “This agreement was approved last week by 97% of shareholder votes. The deal is binding for the company.”
At this stage of the takeover process, it is no longer possible to consider alternative offers. While the agreement between Hapag-Lloyd and Zim contains a “superior offer” clause that would have required Zim to pay a contractual penalty of $150 million if it withdrew from the transaction, this option expired once shareholders approved the takeover. Alternative bids would only become relevant again if the transaction is not completed on time.
The takeover has already had its first personnel consequences: Eli Glickman, President and CEO of Zim, has announced his resignation. A successor has not yet been named.
With a fleet of 115 ships and a capacity of around 700,000 TEU, Zim ranks tenth among the world’s largest container shipping companies. Its orderbook includes a further 24 vessels with a combined capacity of 190,000 TEU. With the takeover, Hapag-Lloyd is consolidating its position among the global top five liner operators.
