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Migdal buys 4.5% stake in British Israel for NIS 50m
By Michael Rochvarger
Tags: migdal, israel news

Migdal, the insurance and financial services company, has acquired a 4.5% stake in real estate firm British Israel for NIS 50 million, TheMarker has learned.

The shares were bought from several institutional and private investors.

British Israel is controlled by British businessman Leo Noe and Finnish-Israeli businessman Poju Zabludowicz.
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Migdal bought its stake for 2% below British Israel's opening share price yesterday. Its acquisition accounted for most of the spike in the share's trading volume - NIS 50.7 million, or 30 times this year's daily average.

The shares were bought for profit-sharing insurance schemes.

British Israel stock has had a wild ride since the crisis began. After plummeting 63% last year, so far its stock has risen 99% from the start of the year, lifting its market cap to NIS 1.2 billion. But that's still about 10% less than its shareholder equity at the end of March.

Evidently Migdal thinks British Israel's shares are still undervalued, and views this as a long-term investment.

Also evidently, Migdal thinks there are bargains to be had. Two weeks ago Migdal purchased 6.5% of the shares of energy company Delek Israel for NIS 95 million from Yitzhak Tshuva's Delek Group. The deal ensured Delek Israel could stay on the Tel Aviv-100 index, by pushing the public float beyond the minimum. Delek Group was diluetd to less than 80%, which xcomplies with the Tel Aviv Stock Exchange's temporary regulations. (When crisis isn't wracking the marketplace, the minimum pubic float to stay on the TA-100 is 25%.)

On Thursday, British Israel wrapped up the public phase of an offering of two new series of unsecured bonds, raising about NIS 30 million, TheMarker has learned. During the institutional phase, the firm raised NIS 120 million.

The offering generated 50% more than anticipated.

The amount includes NIS 77 million raised from straight bonds, and the remainder from convertible bonds, which have an exercise price of NIS 11 per share.

The effective yield for the bonds was set on public offering at 5.25%, reflecting a premium of 4.2% over Galil government index-linked bonds of a similar average duration - about 3.4 years. S&P Maalot rated the bonds A-. They are scheduled to pay two annual installments, in 2012 and 2013.

The issue was led by a consortium of underwriters including Excellence Underwriting, Clal Finance Underwriting, Leumi Partners Underwriters and Menorah Mivtachim Underwriting.
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