Migdal Sells Off Shufersal Stake as Supermarket Chain Faces Financial Pressures
Migdal Insurance has dropped below a 5% stake in «Shufersal» after selling shares worth 125 million shekels. The move follows weak financial results and a 12% drop in the supermarket chain's stock over the past month.
Migdal Insurance, controlled by Shlomo Eliahu, has dropped below the 5% holding threshold in «Shufersal», ceasing to be classified as a stakeholder in the retail giant. The move comes about a month after «Shufersal» released its financial reports for the first half of the year, which showed a widespread decline in the company's operational and financial metrics.
Migdal previously held 6.2% of the chain's shares, valued at approximately 600 million shekels, through its profit-participating policies and mutual funds. According to Calcalist, over the past three months, the insurance company carried out a series of liquidations totaling about 125 million shekels at an average price of roughly 38 shekels per share. The average realization price is about 1.70 shekels higher than the current share price, after the stock lost roughly 12% of its value over the past month.
The sell-off occurs against the backdrop of weak results posted by «Shufersal», which is controlled by brothers Yossi and Shlomi Amir (24.9%), who also serve as co-CEOs. The chain's net profit plummeted by 13.8% to total 299 million shekels, alongside a roughly 2% drop in revenues to 7.1 billion shekels. Identical stores saw an even sharper sales erosion of 2.7%, contrasting with competitors like Rami Levy and Yohananof, which posted growth. Additionally, the company's operating profitability was eroded to 6.3%.
The deterioration in performance follows a period during which the company showed improved profitability thanks to efficiency measures and price hikes. Following the sharp drop in the stock over the past month, «Shufersal»'s position in the TA-35 index is now at risk ahead of the upcoming index update. However, despite the short-term weakness, the company's stock still boasts an impressive surge of about 133% over the past three years.
