Business roundup / Fortissimo bids for Alvarion
Israeli start-up snaps up spin-off of military electronics manufacturer El-Op, while watchdogs ramp up oversight and Can-Fite Biopharma preps for Wall Street debut.
The Fortissimo investments fund proposes to buy a 40 percent stake in WiMax company Alvarion for $15 million. Alvarion has had a rough ride: It lost $146 million over the last three years, during which time it replaced CEO twice and fired about 500 people. Alvarion's market cap on Nasdaq has shrunken to $21.7 million, which is less than the $22 million cash it had as of the first quarter's end.
U.S. telecoms equipment maker Finisar has acquired the Israeli start-up Red-C Optical Networks, a spin-off of military electronics manufacturer El-Op. Finisar is paying $23.7 million in cash and $20 million more contingent on milestones and the employees agreeing to stay. Finisar already operates an Israeli research and development center in Nes Tziona based on the staff and technology of another start-up, Kailight Photionics, which it bought in 2007 for $40 million.
The Tel Aviv Stock Exchange on Tuesday announced that the public float of companies listed on the exchange may not fall short of 90 percent of the company's issued share capital. In other words, the public's holdings after private equity allocations must not fall short of 10 percent of the company's share capital, even at full dilution. Regarding R&D companies and large-cap companies, the minimal public float is 7.5 percent. It bears noting that the TASE's ruling has to be ratified by the Israel Securities Authority.
While on watchdogs, the commissioner of capital markets, Oded Sarig, is threatening to limit new institutional investment in infrastructure and real-estate projects in Israel and abroad to 20 percent. At present the limit is 49 percent. That 20 percent, by the way, is the limit on investment by any Israeli bank in a non-finance company.
Can-Fite Biopharma is planning to dual-list on Wall Street. The company, which develops drugs for liver and inflammatory conditions, expects its ADRs to start trading on Nasdaq (or Amex) in about two months, subject to final approvals from the American regulators.
Ending on a note guaranteed to sour any investor's liver, it turns out that 41 percent of the corporate bonds traded on the Tel Aviv Stock Exchange were trading in junk territory - at yields above 8 percent - at the end of June, says S&P Maalot. At the end of May, the proportion of bonds in said junk territory was 37 percent, and at the end of April the proportion was 29 percent.