Apax edges towards Israeli float of dairy producer

Israel's biggest cottage cheese producer took a step closer to floating on the stock market yesterday after its UK-based private equity owners approved plans to list the company.

Tnuva, which has a stable of top selling brands ranging from kosher chicken to cheese spreads, has been controlled by London-based Apax Partners – owner of UK fashion retailer New Look – for the past six years.

The buyout shop owns 56 per cent of the company, but has decided to sell its stake through a so-called dual track sale process, where a float and a trade sale are both considered.

The sale process is still underway (Weetabix owner Bright Foods has been tipped as a lead contender to buy the company) but yesterday’s decision will add momentum to the float, which could value the firm at $2.2bn.

Apax declined to comment.

Yesterday’s stamp of approval to push forward with a float was notable because Tnuva’s other minority shareholder opposed the move, according to Israeli press reports.

Tnuva, pronounced tee-nuva, is not a traditional conglomerate; it was formed in Israel in 1926 by over 600 co-operative farm-based communities, known as kibbutzim and moshavim.

The communities decided to bring in private capital and sold a controlling stake to Apax in 2008 – but they retain about 23 per cent of shares.

Relations between Apax and the co-operative movement have not all been plain sailing since the two sides joined forces, after a much-publicised boycott of cottage cheese three years ago due to soaring prices of the staple split opinion.

Israeli press reported overnight that representatives of the kibbutzim movement had voted against the float, while its other main shareholder, insurer Mivtach Shamir, had abstained – adding yet another layer of frisson to the story.