Zim deal faces fresh questions after CEO’s $40 million discounted exit
Eli Glickman’s share sale at a discount sharpens investor scrutiny of the transaction.
What led Eli Glickman, CEO of Zim, to sell almost all of his holdings in the Israeli shipping company on the eve of its sale, and at a deep discount to the transaction price?
Glickman himself has declined to answer. On his behalf, it has only been stated that the sale was carried out in full compliance with the law. Yet the question is one that should concern investors and the company’s board of directors, chaired by Yair Seroussi, a board in which, it appears, Glickman has limited confidence.
Last week, Glickman sold 1.4 million Zim shares for approximately $40 million, representing about 87% of his holdings. The shares were sold in two tranches at prices of $28-$29 each.
That price is up to 20% below the $35 per share that Hapag-Lloyd has agreed to pay in its planned acquisition of Zim. In effect, Glickman forfeited roughly $8.4 million by selling ahead of the deal’s completion.
Zim last month signed an agreement to be acquired by the German shipping giant for a total valuation of $4.2 billion. The deal, which would lead to Zim being delisted from the New York Stock Exchange, followed a tender process led by the company’s board.
That process was triggered, in part, by Glickman himself. Earlier, he attempted to acquire Zim through a consortium that included Rami Ungar, owner of Ray Shipping and importer of Kia vehicles to Israel. The group’s offer, $21 per share, valuing the company at $2.4 billion, was quickly rejected.
The very submission of that bid prompted the board to explore strategic alternatives, ultimately leading to the agreement with Hapag-Lloyd, an outcome Glickman may not have anticipated.
One explanation for the share sale is straightforward: Glickman, who received stock options upon becoming CEO in 2017, may simply have chosen to lock in gains. Zim shares have traded as high as $60 in the past, levels at which he did not sell.
But another possibility is more troubling: that the sale reflects doubts about whether the deal will ultimately close.
Completion of the transaction is expected to take up to a year, largely due to the need for approvals from at least 11 regulatory bodies in Israel.
At the center of this process is the state’s “golden share” in Zim, a mechanism established during the company’s privatization. This share grants the government special powers, including the right to approve any transfer of control, set minimum fleet requirements, and even requisition ships in times of national emergency to ensure continuity of maritime supply.
While the golden share does not prohibit a sale to a foreign buyer, it imposes conditions: Zim’s headquarters must remain in Israel, and both its CEO and a majority of its board must be Israeli.
In the current geopolitical climate, particularly given sensitivities in Israel, approval of a sale to a foreign company whose shareholders include sovereign wealth funds from Saudi Arabia and Qatar may prove politically complex.
To address this, Hapag-Lloyd has partnered with FIMI, Israel’s largest private equity fund. Under the proposed structure, FIMI would acquire Zim’s Israeli operations, which would be held in a new entity, effectively a “new ZIM,” where the state would retain its golden share.
Against this backdrop, Glickman’s decision to sell most of his holdings sends a powerful signal, whether intentional or not.
After all, few executives willingly give up $8.4 million. For investors, the move raises an unavoidable question: what does he know that the market does not?
There is no suggestion that Glickman acted on inside information. But perception matters. The timing and scale of the sale risk fueling suspicion and eroding trust.
Some may also interpret the move as a challenge to the board itself, a vote of no confidence in the deal it approved. Others may go further, viewing it as an attempt to influence market sentiment and, potentially, the outcome of the transaction.
The sale also raises a more immediate governance issue: can Glickman continue to lead Zim through what is likely to be a long and complex transition?
Even under optimistic assumptions, the deal is expected to take at least nine months to complete, and more likely closer to a year. During that period, the company must operate independently in a volatile shipping market, shaped in part by regional instability and fluctuating freight rates.
It is possible that the share sale is a precursor to Glickman’s departure. In any case, he is not expected to remain CEO after the deal closes. An earlier exit, however, could complicate an already delicate transition.
For now, the board has remained largely silent.
Following the deal announcement, Seroussi said the sales process had been conducted without management involvement, given its status as an “interested party” after submitting a competing bid. “From the moment management realized that it was not acquiring the company, they went back to work like everyone else,” he said, adding that the company faces “a complex year” of maintaining employees, customers and performance during a transition period.
Glickman’s right to sell his shares is not in question. But the implications of that decision are harder to ignore.
Will the board demand explanations? Will it conclude that the CEO can no longer lead the company through this period? For now, investors are left without answers, and with a growing sense of uncertainty.
The only comment from those close to the board has suggested that the sale actually underscores the attractiveness of the deal’s price.
For the market, that explanation may not be enough.
