Carmel is being bought...

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Carmel is being bought...

Postby David Raccah » Tue Feb 26, 2013 6:28 pm

I have to say - I miss Daniel more and more every day - especially when subjects like this show up. He had a way to talk about the inner workings without pissing off the inner workers.

http://www.wines-israel.co.il/len/ascro ... /12225.php

So, Carmel is being bought and the buyers will take majority to maybe larger control. I wonder will this majority control allow them to manage Carmel's biggest issue? Bad fruit because the contracts are based on yield - rather than on quality?

David
Checkout http://www.kosherwinemusings.com for my blogs on the world of kosher wines and follow me on Twitter http://twitter.com/kosherwinemuse.
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Re: Carmel is being bought...

Postby Craig Winchell » Wed Feb 27, 2013 12:05 am

Carmel is a cooperative. But when it is bought, it will be private, it seems to me. Therefore, the growers will be compensated for their share of the facility and goodwill, the other party will take those, and have control over what fruit they purchase. No wonder so many growers are in an uproar, because another party offered 5% greater purchase offer. Seems the growers who will lose out want to at least get a greater compensation, or at least I would if I were them. the others, who grow good fruit, will want a strong winery to sell to, and 5% now shouldn't matter that much since there will be a future.

Of course, as I read the article, it occurred to me that the consiortium is only purchasing 35% of the stock. That would be pretty silly, taking a minority, not majority interest in Carmel, given that the growers would stillhave control, and therefore could force the company to run things more or less as in the past, taking everyone's fruit.
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Re: Carmel is being bought...

Postby David Raccah » Wed Feb 27, 2013 12:45 am

As the paragraph reads :

The consortium was put together by Kedma Capital, which is run by Gilead Halevy, Gilad Shavit and Uri Einam. The group will immediate purchase 35% of the winery’s shares. The Jewish Agency share of 12.5% and individual growers choosing to opt out, could raise their share to 66%. In any event, Kedma intends that its minimum share will be 50.01%.
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Re: Carmel is being bought...

Postby Craig Winchell » Wed Feb 27, 2013 4:53 am

Right, but what Kedma wants and Kedma gets are 2 different things, potentially. They are hoping for 12.5% from the Jewish Agency, but that still doesn't bring them to 50+%. Then, they hope for opt-out growers. Unless they are diluting shares for that initial 35%, they must be purchasing those shares from somewhere. Probably, each shareholder is getting rid of 35% of his stock. Why else would there be dissatisfaction with the 5% discounted share price over the other offer? Unless there's something I'm not getting here... Now in order to woo the remainder, they may have to privately purchase that remainder at way over the initial price. That means those final shares could net the current owners a major premium per share over what the rest are getting. If I were in that position, and I were one who was forced to sell stock in the initial sale, I'd be dissatisfied too, knowing my neighbor was going to clean up on his opt-out. And if I were Kedma et.al., I wouldn't even think of entering into this type of thing unless I knew from the start that I'd locked up the majority.
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