- The proposed offer is seen as below the board’s valuation expectations.
- ZIM holds $2.8bn in cash but faces $5.7bn in liabilities.
- Evercore hired to seek strategic buyers, including Maersk.
The board of directors at ZIM, a shipping company, isn’t rushing to negotiate with CEO Eli Glickman. He, along with shipping mogul Rami Ungar, is keen on buying up all of ZIM’s shares. However, the board isn’t impressed with the price being discussed by Glickman, five senior executives from ZIM, and Ungar, as it falls short of their expectations, reports CTech.
Financial Position of ZIM
Currently, ZIM has around $2.8 billion in cash, but it also has $5.7 billion in liabilities, which includes $1.23 billion in short-term debt. Analysts suggest that any offer made is likely to value the company at less than its cash reserves. To get ready for potential buyers, ZIM’s board has brought in consulting firm Evercore, led by Len Rosen in Israel, to reach out to possible strategic buyers and investment funds. One of the companies they’ve contacted is the Danish giant Møller-Maersk, which reported an impressive $6.5 billion profit in 2024, a year they called exceptional.
Industry Headwinds
The broader container shipping industry saw profits of $60 billion in 2024, but predictions indicate a steep decline to just $10 billion in 2025. ZIM’s share price has dropped from $17.40 to $13.63 following disappointing second-quarter results, which have brought its market capitalisation down to $1.64 billion. Quarterly profits plummeted to $24 million from $373 million a year earlier, impacted by fluctuating trade, lower freight rates, changes in U.S. tax policy, and Israeli vessels being barred from Turkish ports. Despite these challenges, ZIM has revised its 2025 forecast, now projecting EBITDA between $1.8 and $2.2 billion. For the first half of 2025, profits reached $320 million.
Glickman’s Dual Role
While Glickman hasn’t put forth a formal offer just yet, he’s still serving as CEO alongside the executives in his bidding group. So far, the board hasn’t flagged any conflicts of interest regarding their performance. However, if competing offers come into play, there might be growing concerns that management could prefer to keep ZIM’s valuation low, making a buyout simpler. In that scenario, Glickman might be asked to step back until his proposal is sorted out.
Role of the Board and Former Shareholders
The board, led by Yair Seroussi, the former chairman of Bank Hapoalim, will ultimately determine if selling ZIM is in the company’s best interest. Until recently, Glickman hadn’t indicated that ZIM needed a new owner, even after Idan Ofer stepped down as the controlling shareholder in 2024. Two directors associated with Ofer are still on the board.
Ungar’s Strategy With Ray Shipping
Industry insiders believe that Rami Ungar, who also imports Kia vehicles to Israel, is looking to acquire ZIM and eventually merge it with his own company, Ray Shipping. The plan likely involves a share-swap and cash deal, forming a mid-to-large-sized shipping group. The two businesses complement each other well, with ZIM focusing on container shipping and Ray operating 65 car and truck carriers around the globe.
Golden Share Restrictions
ZIM is still bound by Israel’s golden share regulations. These rules require a majority-Israeli board, an Israeli chairman, and 11 ships to be available for state use in emergencies. While these stipulations might put off some investors, industry experts suggest they’re only a minor hurdle for large international shipping companies.
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Source: CTech
