Acquisition Offers Boost Alvarion Shares by 40%

Bankrupt Israeli company’s stock has risen 500% on the TASE in recent days, as several companies make offers to restart operations.

Alvarion shares shot up 40% to NIS 3.99 per share on Tuesday on news of acquisition offers for the bankrupt company. The jump brings its advance over a matter of mere days to 500%.

The firm, which develops and manufactures wireless network systems, has been in the news due to a serious cash flow crunch and a plummeting stock price.

The company had $24.4 million in debts as of July's end, including $7.3 million to banks and suppliers and NIS 7 million to employees, while its total assets are only worth $23 million. In July, a court approved a plan to operate the company on a reduced basis and appointed accountant Yoav Kfir to act as the company's receiver.

Several companies have reportedly made offers to acquire Alvarion’s operations, including Radvision and Valley Telecom. On Tuesday, the Sigma Wave fund, which tried to purchase Alvarion before it entered liquidation, sweetened its offer in terms of which employees could immediately return to work and relationships with suppliers and customers would be revived.

The offer also includes a provision for granting stock to employees who choose to remain at the company.

As a result, receivership has not dampened trading in Alvarion stock. The company’s shares on the Tel Aviv Stock Exchange rose 500% in recent trading to a price of NIS 3.90 per share, giving the company a market value of NIS 28 million.

The sharp spike in Alvarion's stock price followed a no-less-steep decline. On July 14, trading of the company's stock was halted for five days, after its price fell 55% in two days, from NIS 3.61 to NIS 1.62. It continued to drop after trading resumed, more than halving in value.

At the end of last month, NASDAQ announced that intended to delist the company's dual listing on the exchange. However, following the news of recent days, the value of Alvarion's American-listed shares has jumped hundreds of percentage points, from a low of $0.19 per share to $0.51.

Nimrod Glickman