October 8, 2014
China's Bright Food gets three-month extension to complete purchase of Israeli dairy giant Tnuva
In May, Bright Food reached an agreement with British equity firm Apax, to acquire a 56% stake in Tnuva, Israel's biggest food company.
Investment group Mivtach Shamir Holdings said in a statement to the Tel Aviv Stock Exchange that Bright Food, after receiving a three-month extension has until January 5, 2015 to complete this acquisition of Tnuva. Mivtach did not provide any further information on why Bright Food did not complete the acquisition by the originally scheduled October 5 deadline.
A source familiar with the agreement but wished to remain anonymous, expressed confidence that the deal will go through adding that if Bright Food were to drop the purchase at this point, the company will have to pay a penalty of US$20 to 40 million.
Israeli website Calcalist stated that Bright Food has requested for an extension to further evaluate Tnuva's results in response to a 3.5% drop in Tnuva's sales in the first half of 2014. Decline in sales over the summer due to the 50-day Gaza war have raised considerable concern for the Chinese group as well.
It is also reported that Bright Food is seeking an adjustment in the deal that would result in a reduction of up to 30 million shekels (US$8.04 million) on the purchase price.