For the second time this 12 months, the share value of ZIM Built-in Transport Companies Ltd. (NYSE: ZIM) has made a double digit share bounce on reviews that the Israeli transport firm could also be acquired. In line with reviews, the potential acquisition is being led by the corporate’s CEO Eli Glickman, that means it’s a administration buyout (MBO) deal, during which an organization could be acquired by its senior executives.
Glickman presently holds 1.2% of ZIM’s shares (price $25 million), and in keeping with reviews he might be a part of forces with automotive and transport tycoon Rami Ungar within the acquisition try.
ZIM’s shares jumped 14.95% yesterday on Wall Avenue, to present a market cap of $2.145 billion. After the share value surge, ZIM introduced that, “It’s conscious of the rumors out there relating to a doable acquisition proposal. As a matter of coverage, the corporate doesn’t touch upon market rumors or hypothesis.”
Jefferies marine transport fairness analyst Omar Nokta wrote that he has issue seeing a deal that will flip Zim into a personal firm materialize. He stresses, the main points of such a deal are unclear, however in keeping with publications it could be price about $2.4 billion for the corporate, about $20 per share.
Nokta says, ZIM is the ninth largest firm within the business, transport about 4 million containers per 12 months, and its prices are on the higher finish of the business. He provides that if a ZIM acquisition deal had been financed with 50% debt, the curiosity and principal would improve the quantity to interrupt even per container. “Taking debt at this level within the enterprise cycle could be a giant gamble in our opinion,” writes Nokta.
Jefferies additionally raises the query of whether or not the shareholders of ZIM, which was beforehand managed by Idan Ofer, would conform to promote for lower than the money gathered in its coffers. “Is it sensible to estimate that buyers could be prepared to simply accept an acquisition supply decrease than ZIM’s money worth, which stands at $2.9 billion?” asks Nokta, including that the corporate has traded under money worth for many of the previous two years. He estimates {that a} value of $20 per share (a 12% premium over the market value after the bounce on Monday) sounds honest, however he notes that Wall Avenue could be “stingy” with acquisition provides.
Taking ZIM personal would improve its monetary dangers
“Whatever the adverse outlook for the market that has been round for a while however has but to materialize, ZIM’s platform has been a ‘money cow,’” the analyst writes, noting that since its IPO in 2021, the transport firm has posted a internet revenue of $4.6 billion in every of 2021-2022, misplaced $575 million in 2023, and returned to a revenue of $2.1 billion in 2024 (the corporate reported a revenue of $296 million within the first quarter of 2025).
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Nokta provides one other aspect that would make a takeover bid troublesome: He says ZIM’s excessive value construction requires it to have a “money cushion” or an distinctive freight market. He says the corporate is exclusive in its potential to seize excessive freight charges, however this comes with a better working value. “This has paid off for the corporate properly for the reason that IPO,” he famous.
“We consider it’s important for ZIM to take care of a excessive money steadiness that may be relied upon in periods of low freight charges. Its present construction permits it to generate more money move in robust durations however results in money burn in much less favorable durations. Due to this fact, it’s troublesome for us to see the belief of a deal to take ZIM personal, which might improve the monetary dangers for the corporate.”
Jefferies suggestion stays “Maintain,” with a value goal of $17, 4.5% under the share’s present market value.
Printed by Globes, Israel enterprise information – en.globes.co.il – on August 12, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
