RICHMOND, Va. -- GPM Investments' bid for half of EZ Energy may be "much more than meets the eye" of a seemingly simple transaction, according to a report in Israel's Haaretz newspaper.
Richmond, Va.-based GPM has offered $15 million for a 50% share of Seven Hills, Ohio-based EZ Energy, as previously reported in CSP Daily News (see Related Content below). Both companies are primarily convenience-store operators, and both are owned by Israeli business-equity groups.
Contacted via email, GPM CEO Arie Kotler told CSP Daily News he is currently in Israel, working to consummate the deal. As a result, he was unable to comment further.
However, Haaretz reported yesterday that the deal would help EZ Energy meet its next bond payment of $18 million, which, before the offer, was in grave doubt.
To that end, Kotler, also chairman and CEO of GPM parent company Arko Holdings Ltd., didn't address his offer just to EZ Energy, but also to its bondholders, asking them to allow the $15 million payment for EZ USA to go toward purchasing EZ Energy's bond debt at a discounted price, according to the report. In the offer, the report stated, Kotler made it clear that, unless both requests are accepted, the deal won't go through as it stands.
If the purchase offer isn't accepted, the company will negotiate with bondholders to spread payments over a five-year period, according to the report.
Despite the suggested haircut, EZ Energy bonds reacted in Tuesday trading by rising 5.4% and another 2% Wednesday, according to Haaretz. The bonds, however, are trading at a junk territory yield of 124%, reflecting investor despair of getting their money back, the report stated.
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