Recently, the Sakal Group launched a $4.5 billion cash acquisition offer for Zim, outbidding Hapag-Lloyd's previously agreed-upon $4.2 billion deal.

Haim Sakal

According to a report by Ynet, on May 5th, Sakal, led by Haim Sakal, submitted a letter to Zim's board of directors proposing an all-cash acquisition at $37.50 per share, totaling $4.5 billion. This offer is $300 million higher than the agreement between Hapag-Lloyd and the FIMI Opportunities Fund.

The report states that the Sakal family has long been involved in duty-free sales and shipping agency services. This bid is reportedly made in conjunction with other unnamed investors. The Sakal Group has promised that if the acquisition is successful, it will pay Zim employees a $250 million bonus and ensure that Zim's fleet of 145 vessels and its operational centers remain under full Israeli ownership. Zim's labor union has welcomed the move, calling it a "better proposal" and stating that the plan treats employees as true partners.

However, Zim responded swiftly, reaffirming its support for the deal with Hapag-Lloyd. In a statement, Zim pointed out that the merger agreement, which was approved by a shareholder vote (97% in favor) on April 30th, is binding. While not directly mentioning the Sakal Group's bid, the statement said: "The Board of Directors continues to support the merger transaction with Hapag-Lloyd, and both parties are communicating with relevant regulatory bodies, including the State of Israel, to satisfy the regulatory conditions required for the transaction and to complete the closing."

Stimulated by the news of the competing offer, Zim's stock price surged nearly 10% in the New York market. Fredrik Dybwad, an analyst at Fearnley Securities, stated that due to the legally binding agreement between Zim and Hapag-Lloyd, the likelihood of a competing offer succeeding is low. However, he also noted that the emergence of a competing bid could actually reduce the risk of the Hapag-Lloyd deal failing, as it is unlikely that the Sakal Group would have made a higher offer unless it believed Hapag-Lloyd's acquisition could succeed.

Under Hapag-Lloyd's acquisition plan, the merged entity will maintain its position as the world's fifth-largest container shipping company, expanding its lead over the sixth-largest operator, ONE. Concurrently, the agreement plans to transfer Zim's Israeli state-owned equity to the private equity fund FIMI, which will use its own capacity to establish a new Israeli shipping company with a fleet of 16 vessels.

Currently, Zim's ultimate fate remains uncertain. While Hapag-Lloyd's transaction is legally binding, the Sakal Group's higher offer introduces new variables. Ultimately, which proposal comes to fruition will depend on legal procedures, regulatory approvals, and further decisions by Zim's board of directors. The industry will be watching this situation closely.