ZIM faces pivotal vote as company weighs at least three acquisition offers
With a decisive general meeting on the 19th, shareholders must choose a board that will steer the shipping giant through competing bids and rising political pressure.
Zim is preparing for a general meeting to be held on the 19th of the month, in which shareholders will vote on the selection of a new board of directors. These elections carry relatively significant weight given that the company is currently in the process of being sold. Calcalist has learned that the consulting firm ISS recommends that Zim’s foreign shareholders support the company’s existing directors and re-elect them. They will face three candidates nominated by Israeli institutional investors: More, Sparta, and Reading Capital. The three nominees are Keren Bar Hava, Ron Hadassi, and Ran Gritzstein.
In a letter sent to Zim about a month ago, the group hinted that at least two directors should be replaced: Yair Caspi, who serves on the boards of companies that are or were controlled by Idan Ofer, such as OPC, and Yoav Sebba, a director at XT, which is jointly owned by Idan Ofer and Udi Angel. However, both resigned on their own initiative shortly after the letter, and Zim’s board of directors appointed two former regulators in their place, Yoram Turbowicz, former head of the Antitrust (now Competition) Authority, and Yair Avidan, former Supervisor of Banks.
Zim’s board of directors is chaired by Yair Seroussi, and the board includes members with backgrounds, at least partially, in the shipping sector. Zim holds cash, cash equivalents, and investments in securities with a total value of $2.87 billion, or $23.8 per share. The stock is traded on the stock exchange at about $20, below the company’s cash value.
Zim is in the process of searching for an investor, a move prompted after the company’s CEO, Eli Glickman, a close associate of Israeli shipping tycoon Rami Ungar, submitted an offer to acquire the company. The bid was valued at less than the amount of cash Zim currently holds, and the board of directors quickly appointed the investment bank Evercore to examine options for counteroffers. As far as is known, Zim has received at least three acquisition offers.
One of them was revealed on Thursday after the company’s workers’ union sent a letter to Transport Minister Miri Regev, demanding that the sale of the company to the German shipping giant Hapag-Lloyd, headquartered in Hamburg, be blocked. The largest shareholders in Hapag-Lloyd, which is traded at a valuation of more than $20 billion, are businessman Klaus-Michael Kühne and Chilean shipping company CSAV, each holding 30%. They are followed by the municipality of Hamburg (14%), a Qatari government investment company (12.5%), and the Saudi sovereign wealth fund (10%).
The union, headed by Oren Caspi, argues that selling Zim to a company whose shareholders include the Saudi and Qatari sovereign funds poses a national security risk. The state holds a “golden share” in Zim that requires the company, which operates about 180 ships, to make 11 vessels available for state use at any future time. In addition, a majority of the directors and the chairman must be Israeli, the headquarters must remain in Israel, and the state has veto rights over any transaction involving the sale of more than 24% of the shares.
People close to the tender said the Hapag-Lloyd offer is not necessarily the highest among the bids submitted and that Zim was surprised by the strong interest in acquiring the company despite the situation in Israel. The union opposes any form of foreign ownership of Zim, which directly employs about 1,000 workers in Israel.
The union notes that 98% of Israel’s trade depends on maritime transport, and that “Zim is the only shipping company that docked in Israel during the Swords of Iron war and brought food, medicine, ammunition, and critical military equipment, and that the moment it passes to hostile foreign control, the country will lose this ability completely.” A meeting is expected this week between Transportation Minister Miri Regev and union members, after which the state’s position regarding a sale to a foreign entity may be determined.
