Markets in Brief

Elboim injunction given the elbow by court in B. Yair fight

The courts yesterday rejected the motion by B. Yair minority shareholder Mordechai Elboim, who sought an injunction to block a shareholders assembly at month-end. The assembly will be asked to approve employment terms for controlling shareholders Yair and Yosef Biton at a wage cost of NIS 5.3 million a year. There is no assurance that the shareholders will vote in favor of these terms: As an insider transaction, the company will need the approval of half the disinterested shareholders. Elboim owns 6.5% of B. Yair's stock. He sold a 4% interest some weeks ago and won't say to whom, which means the position of that shareholder regarding the Yairs' employment terms cannot be ascertained at this time. The Yairs own 86.5% of the company's stock; the general public owns 2%; Elboim owns 6.5% and the mystery shareholder owns 4%. Elboim, a Haredi from Jerusalem, opposes the multimillion shekel pay package on the grounds that the Yairs are depriving minority shareholders. Elboim says the Yairs charge him with not being a "minority shareholder" but an "extortionist." The Yairs claim that, among other things, over the years Elboim has demanded loans from the company, and that the Yairs buy him out at double the share price at the time. Asked for an opinion, the Israel Securities Authority ruled that Elboim is a minority shareholder (not an interested party ) for the purposes of the vote. (Eran Azran )

	Roni Bar-On
	Photo by: Ofer Vaknin

Delek Real Estate sells Quebec property

Delek Real Estate yesterday announced the sale by subsidiary Delek Global Real Estate of its 51% interest in the Trois Rivieres property in Quebec, Canada, for NIS 171 million. The site is valued in DGRE's books at NIS 144 million. It will be posting a profit of NIS 27 million on the sale. The outstanding loan on the property is NIS 123 million. Delek Real Estate, controlled by Yitzhak Tshuva's Delek Group, has been aggressively selling assets for two years to reduce debt. Last month the company paid bondholders NIS 220 million. In September it is scheduled to pay NIS 306 million more. Altogether this year Delek Real Estate is supposed to repay its bondholders NIS 663 million, and NIS 605 million in 2012. At the start of this month, S&P Maalot downgraded Delek Real Estate's bond rating by six notches, to CCC. The decision was based on the company's poor liquidity and uncertainty regarding its sources to repay bondholders after the putative sale of property in the UK - which had been the main source to repay debtors - fell through. (Oren Freund )

UBS likes Israel Corp. better than ICL

UBS likes the Israel Corporation better than its subsidiary, Israel Chemicals (ICL ). UBS analyst Roni Biron raised his 12-month price target for Israel Corp., which is controlled by the Ofer family, from NIS 4,650 to NIS 5,068 and gave the company a Buy recommendation. Israel Corp. presently trades at NIS 3,660. The company is significantly undervalued on the market, Biron says, after falling 14% during the last 12 months. Meanwhile, the asset value of ICL, in which Israel Corp. owns a 52% interest, increased by 42%, he says. Considering that conglomerates, like Israel Corp., trade at a discount of 20%, he sees an upside of 39% to Israel Corp. stock. Among the factors are the company's diversified portfolio, Biron says. ICL presently trades at NIS 52.20. Biron's target for the stock is NIS 68. (Shelly Appelberg )

Merrill Lynch cuts target price for Partner shares to NIS 54

Merrill Lynch Bank of America analyst Haim Israel sees many challenges in Partner Communications's future, lowering his 12-month price target for the mobile operator yesterday. One challenge is mounting competition with two new GSM operators starting operations, probably in the first quarter of 2012. Three MVNOs (mobile virtual network operators ) are also gearing up. Partner (and the other cellular operators ) saw revenues drop after the Communications Ministry forced them to slash their network interconnection fees (mobile termination rates ). It also forced them to slash their "fines" for early contract termination by customers. And then there are the aggressive marketing drives for smartphones. Israel sees Partner losing clients during 2011, and foresees 2012 being a particularly onerous year for the company because of competition. There are also risks in possible economic crisis slowdown, which could depress demand for its services, and in regulatory changes to encourage competition. Israel lowered his 2011 revenue forecast to NIS 5.7 billion (EBITDA of NIS 1.8 billion ) and cut his 12-month price target to NIS 54. His recommendation for the company is Underperform. (TheMarker )

Arazim not safe as houses as stock plunges

Arazim stock plunged on the Tel Aviv Stock Exchange yesterday, closing 15.3% lower on thin turnover after the company announced it hadn't managed to reach an agreement with the German bank financing a huge building project in Dortmund, involving 2,119 housing units. A subsidiary of Arazim owes the bank 53 million euros. As the subsidiary hasn't repaid the loan as the bank demanded in 2010, Arazim suspects the bank will foreclose on the housing units and begin bankruptcy proceedings against the subsidiary, it said. (Shelly Appelberg )