Delta Israel offers to snap up retail chain Golf in an all-cash deal

Delta Israel Brands Ltd., the Israeli spinoff of textile manufacturer Delta Galil Industries Ltd., announced on Tuesday that it has entered into a non-binding agreement to buy all of the shares in fashion and home design retail chain Golf & Co Group Ltd.

According to the initial agreement, Delta Israel made an offer to purchase Golf at a company valuation of NIS 425 million, plus a payment of NIS 25 million subject to the retail chain’s future financial results, as part of an all-cash transaction. The offer represents a premium of almost 130% to Golf’s market cap at the close on Feb. 13.

Shares in Tel Aviv Stock Exchange-listed Golf, which is controlled by Clal Industries, soared more than 70% in afternoon trading, while Delta Israel stock rose more than 7%. The Golf group has 330 stores across Israel and employs 2,700 people. Its brands include Polgat, Intima, Kitan and Adika.

Delta Israel is proposing to acquire Golf through a reverse triangle merger, which means that if the all-cash acquisition is approved and goes ahead, Golf will be delisted from the Tel Aviv Stock Exchange and integrated into Delta together with its shareholders, according to a statement to the Tel Aviv bourse.

In parallel, Golf announced in a TASE statement that if the talks with Delta do not mature into a binding deal, its controlling shareholder Clal Industries is examining an alternative transaction in which Steimatsky and Golf CEO Eyal Greenberg increase their holdings and jointly control the company with Clal.

Delta Israel, which employs 885 people, holds the largest chain of underwear, pajamas and loungewear in Israel marketed under three main brands – Delta, Fix and Panta Rei – sold at more than 200 stores nationwide and four e-commerce sites, according to the retailer’s website. The textile maker’s products are also sold at 1,400 additional sales points in various retail chains, private stores or under private labels. It also represents the Victoria’s Secret brand in Israel.

Back in September 2020, parent company Delta Galil, a textile manufacturer of branded and private label apparel, decided to split its operations in Israel into a separate company, Delta Israel, which made an IPO on the Tel Aviv Stock Exchange in February 2021.

Founded in 1975 by industrialist Dov Lautman, Delta Galil is a maker of men’s and women’s underwear, bras, socks, baby clothing, leisurewear and nightwear. The brands it supplies its products for include Schiesser, Eminence, Athena and PJ Salvage.