ZIM's 'Golden Share' Makes it a Challenging Takeover Target, CEO Glickman Says

Israeli shipping company ZIM Integrated Shipping has a "golden share" held by the government, which requires the majority of the board to be Israeli, including the Chairman and CEO. This limits the potential candidates for takeover, according to CEO Eli Glickman. The golden share gives the government significant influence over the company.

Israeli shipping company ZIM Integrated Shipping (NYSE:ZIM) faces significant challenges in potential takeovers due to its "golden share" held by the Israeli government. This unique ownership structure mandates that the majority of the board, including the Chairman and CEO, must be Israeli citizens [1]. CEO Eli Glickman has acknowledged this constraint, noting that it narrows the field of potential acquirers [1].

The golden share, which gives the government substantial influence over the company, has been a contentious issue. It was reported that Abraham Unger, an Israeli shipping magnate, had sought to buy ZIM, take it private, and merge it with his company Ray Shipping in a cash-and-stock deal [1]. However, the restrictive provisions involved in any transfer of ZIM's ownership may have deterred other potential buyers.

The financial markets have reacted to the rumors, with ZIM's shares slumping by 22% since the rumors surfaced on August 11 [1]. Additionally, the company has faced criticism for its financial performance, including concerns about its cash burn rate and guidance for FY2025 [1].

Despite these challenges, ZIM remains an integral part of Israel's shipping industry. Its unique ownership structure, while limiting takeover options, also ensures a level of stability and control for the Israeli government.

References:
[1] https://seekingalpha.com/news/4490148-golden-share-makes-zim-a-tough-takeover-target-ceo-glickman-says