TAKE A LOOK AND LEARN THE FACTS
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nothing about the beverage mar-
ket and was destroying Tempo.
Since then, the major share-
holders did their best to prove
their superiority over each other
and gain control of the company.
One of the more drastic devel-
opments occurred last August,
when the Tel Aviv Stock Ex-
change was at an all-time low.
Mr. Podhorzer decided to take
advantage of the situation and
acquired 20 percent of Tempo's
stock from mutual funds, in-
creasing his personal stake to
44.5 percent.
One day later, Mr. Bar pur-
chased an additional 4.5 percent
share of Tempo, increasing his
holding to 51 percent. The addi-
tional shares were purchased at
a price 250 percent above mar-
ket value.
Yet what seemed at the mo-
ment as at least a tactical victo-
ry for Mr. Bar proved to have
been the straw that broke
Heineken's strategic patience.
Hardly before he could bask in
his little coup, Mr. Bar learned
that the Dutch were threatening
to cancel Tempo's exclusive li-
cense to manufacture and dis-
tribute its beers in Israel unless
one of the major shareholders
sold his stake, thus allowing
Heineken to become a full-
fledged partner in the company.
The mere thought of Heineken
carrying out its threat sufficed
for the major shareholders to
reach a compromise — adminis-
tered by advocate Ram Caspi —
by which Mr. Podhorzer has giv-
en an irrevocable option to sell
his 44.5 percent share in Tempo,
for $42 million, to the Dutch
Heineken group or the Bar
group.
Ultimately, Heineken pur-
chased Mr. Podhorzer's entire
stake and a portion of the shares
owned by Mr. Bar and Mr. Born-
stein's grandchild, Amir.
Tempo was valued at about
$93 million on..the day the deal
was reached — more than 40
percent higher than its stock
market value that day, and still
far higher than its current $75
million Tel Aviv Stock Exchange
value.
Mr. Podhorzer apparently
finds solace in the fact that while
he is giving up on Tempo, he has
not ceded its control to Mr. Bar.
According to the agreement, had
Mr. Bar exercised his 90-day op-
tion, he would have had to sell
his shares to Heineken. In other
words, Mr. Podhorzer made the
sale of his shares subject to them
winding up in Heineken's hands.
Exercise of the option was also
subject to Heineken holding at
least 50 percent of the shares in
Tempo. This means that Bar
would have had to sell Heineken
at least another 5.5 percent of his
shares.
Assuming Heineken goes
ahead with its plans to invest in
Tempo, it will be joining a long
list of multinational firms that
have recently entered the Israeli
beverage and food sector through
partnership agreements with lo-
cal manufacturers.
Prominent among these are
Nestle, which after having tak-
en over Osem is also joining
hands with Tnuva; Unilever
which has created a partnership
with Strauss; and Copenhagen-
based Carlsberg which has es-
tablished a brewery in Ashkelon
in partnership with Coca Cola Is-
rael's Central Bottling Compa-
ny.
This globalization trend has
enabled local manufacturers to
diversify their basket of products
and take advantage of the multi-
nationals' technology, know-how
and experience as well as mar-
keting and distribution ability.
The multinationals are strate-
gically interested in establishing
an Israeli presence in an attempt
to spread their reach across a
Middle East where they forecast
considerable growth opportuni-
ties in upcoming years.
It remains to be seen whether
after completion of the Pod-
horzer-Bar-Heineken agreement
Tempo's beer and soft drinks
businesses will remain under one
roof, since Pepsi has an option on
50 percent of the shares of the
soft-drinks division.
Though it is too soon to an-
nounce any definite changes, Mr.
Bar says one option is to re-
structure the company so that
Heineken will ultimately become
a shareholder together with Tem-
po in the beer business. "This
would enter it a split-up of the com-
pany into two entities," he says.
At any rate, now that the pow-
er struggles which have plagued
its balance sheets are over, Tem-
po can finally go ahead with de-
velopment and growth plans.
Senior managers will no longer
have an excuse for poor perfor-
mance, and might be forced to re-
sign for ill-advised business
decisions, as Managing Director
Dan Bibro, along with his na-
tional sales manager, marketing
manager and other senior exec-
utives, already have last year.
Tempo's financial statements
for 1996 will be published later
this month, and there are already
indications that the company's
performance was worse than the
previous year.
Though it is still too early to
make predictions, it is already
clear that Tempo's new leader-
ship, led by Yaki Vadmany, in-
tends to make major cut-backs
in an attempt to improve the
company's performance by the
summer, when the beverage in-
dustry's activity is at its peak.
According to Mr. Bar, the com-
pany will lay off about 100 of
their 1,200 workers, merge ac-
tivities, transfer some operations
to subcontractors and imple-
ment other cost-cutting mea-
sures. 0
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