Business in Brief - Supermarket Chain Shufersal Slides to Quarterly Loss

Ormat to merge with Ormat Technologies; Leumi to buy 20% of Nilit; TASE falls back; Farmers resume direct sales to consumers.

Reuters

Ormat to merge with Ormat Technologies

Geothermal energy producer Ormat Industries’ board of directors approved a merger with U.S. subsidiary Ormat Technologies on Monday. The parent company owns 59.76% of the subsidiary. The merger will be carried out by allocating shares of Ormat Technologies to shareholders in Ormat Industries, leaving the latter with 62.3% of the former subsidiary’s share capital. This allocation grants them a 5.5% premium over Ormat Technologies’ share price as of yesterday. Following the merger, Ormat Technologies will become a privately held company and be erased from trade on the Tel Aviv Stock Exchange. (Yoram Gabison)

Supermarket chain Shufersal slides to quarterly loss

Shufersal, Israel’s largest supermarket chain, posted its second straight quarterly loss yesterday, even as it presses ahead with a cost-cutting plan that it hopes will offset a popular push for lower prices. Israelis have protested in recent months over high living costs, demonstrating in particular against the high price of food. The government has threatened to widen price controls and ease import taxes to increase competition, prompting retailers like Shufersal to drop prices and expand cheaper offerings under their own label. The company posted a quarterly loss of 24 million shekels ($6.3 million), compared with a 34 million shekel profit a year earlier. Shufersal, controlled by holding company Discount Investment Corp., launched a strategic plan earlier in the year that includes closing inefficient branches and cutting costs. (Reuters)

Leumi to buy 20% of Nilit

Bank Leumi signed a deal to buy 20% of nylon threads manufacturer Nilit from the private investment fund Markstone. The deal comes after an exhaustive due diligence process that included visits to factories in China and the United States. Leumi Partners, the bank’s investment arm, will be paying $45 to $50 million (170 to 190 million shekels) for the stake. The final price will be set based on Nilit’s performance over the next few years. (Michael Rochvarger)

TASE falls back

The Tel Aviv Stock Exchange lost ground yesterday, heading deeper into the red as trading on Wall Street began toward the end of trade in Tel Aviv. The blue-chip Tel Aviv-25 Index lost 0.5% to close at 1,445 points, while the broader Tel Aviv-100 Index lost 0.6% to close at 1,290 points. The Banks-5 lost 2.3%, led downward by Leumi, which was off 2.8%. The Real Estate-15 lost 1.4%. Total turnover was a relatively low 872 million shekels. Notable shares included IDB Development and Discount Investments. IDB lost 15%, putting it down 37% for the past two days, while Discount lost 8.2%, putting it off 46% for the past two days. Investors are disappointed with the valuation of crop-protection manufacturer Adama, a company jointly controlled by IDB Development and Discount, following the publication of a pre-IPO prospectus for the subsidiary. Other notable shares include Shufersol, off 3% after publishing quarterly results revealing a 24 million shekel loss for the quarter. (Omri Zarchovich)

Farmers resume direct sales to consumers

Students and farmers are renewing an initiative to sell produce directly to consumers, as part of the so-called “pepper protest” against the rising prices of fruit and vegetables at grocery stores. As part of the initiative, farmers will set up stands at Sapir College, near Sderot, tomorrow. Similar sales will be held at other campuses around the country, said the National Student Union yesterday. Farmers blame markups by retailers and middlemen for the stores’ high prices. (Ora Coren)