For the second time this year, the share price of ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) has made a double digit percentage jump on reports that the Israeli shipping company may be acquired. According to reports, the potential acquisition is being led by the company’s CEO Eli Glickman, meaning it is a management buyout (MBO) deal, in which a company would be acquired by its senior executives.
Glickman currently holds 1.2% of ZIM’s shares (worth $25 million), and according to reports he may join forces with automotive and shipping tycoon Rami Ungar in the acquisition attempt.
ZIM’s shares jumped 14.95% yesterday on Wall Street, to give a market cap of $2.145 billion. After the share price surge, ZIM announced that, “It is aware of the rumors in the market regarding a possible acquisition proposal. As a matter of policy, the company does not comment on market rumors or speculation.”
Jefferies marine shipping equity analyst Omar Nokta wrote that he has difficulty seeing a deal that would turn Zim into a private company materialize. He stresses, the details of such a deal are unclear, but according to publications it would be worth about $2.4 billion for the company, about $20 per share.
Nokta says, ZIM is the ninth largest company in the industry, shipping about four million containers per year, and its costs are at the upper end of the industry. He adds that if a ZIM acquisition deal were financed with 50% debt, the interest and principal would increase the amount to break even per container. “Taking on debt at this point in the cycle would be a big gamble in our view,” writes Nokta.
Jefferies also raises the question of whether the shareholders of ZIM, which was previously controlled by Idan Ofer, would agree to sell for less than the cash accumulated in its coffers. “Is it realistic toassume investors are willing to accept a take-out offer that comes below ZIM’s cash position of $2.9 billion? asks Nokta, adding that the company has traded below cash value for most of the past two years. He estimates that a price of $20 per share (a 12% premium over the market price after the jump on Monday) sounds fair, but he notes that Wall Street can be “stingy” with acquisition offers.
Taking ZIM private would increase its financial risks
“Irrespective of the bearish container outlook that has persisted for some time yet not truly materialized, ZIM’s platform has been a cash cow,” the analyst writes, noting that since its IPO in 2021, the shipping company has posted a net profit of $4.6 billion in each of 2021-2022, lost $575 million in 2023, and returned to a profit of $2.1 billion in 2024 (the company reported a profit of $296 million in the first quarter of 2025).
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Nokta adds another element that could make a takeover bid difficult: He says ZIM’s high cost structure requires it to have a “cash cushion” or an exceptional freight market. He says the company is unique in its ability to capture high freight rates, but this comes with a higher operating cost. “This has paid off for the company well since the IPO,” he noted.
“We believe it is essential for ZIM to maintain a high cash balance to fall back on in case of periods of low freight rates. Its structure today puts it in a position to generate substantial free cash flow in a strong freight market environment but a balanced “mid-cycle” environment or oversupplied “down-cycle” market lead it to burn cash. Thus, we find it difficult to envision a take-private transaction materializing: the financial risks would be more amplified as a private entity and yet investors may not let it go for below cash. ZIM may simply be stuck in “no man’s land””
Jefferies recommendation remains “Hold,” with a price target of $17, 4.5% below the share’s current market price.
Published by Globes, Israel business news – en.globes.co.il – on August 12, 2025.
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