Business in Brief - Market Tech to Be AIM's Biggest IPO of 2014

Psagot cuts ratings for top three banks; U.S. court foils Teva’s plans for Celebrex; Speech Modules rallies on Comverse deal; Wall Street chases away Russian bear.

David Bachar

Market Tech to be AIM’s biggest IPO of 2014

Israeli billionaire Teddy Sagi is on his way to staging the biggest initial public offering this year on the London Stock Exchange’s AIM Market. His Market Tech, a property company that owns big swathes of the trendy Camden Market shopping complex in London, was priced yesterday at 200 pence ($3.14), thereby valuing the company at 750 million pounds. Sagi, who made a fortune with the online gambling company Playtech, spent 500 million pounds acquiring his Camden Market holding earlier this year. The 100 million pounds Market Tech is raising in the IPO will be invested in developing an e-commerce site for the market and additional construction. (TheMarker Staff)

Psagot cuts ratings for top three banks

Psagot Investment House yesterday sharply lowered its ratings and profit outlook for Israel’s three biggest banks after Banks Supervisor David Zaken signaled he planned to order banks to increase set-asides for credit risks. Psagot lowered its ratings for Bank Hapoalim, Bank Leumi and Israel Discount Bank from Market Outperform to Market Perform, but it said it was most bearish on Hapoalim. “We believe that Bank Hapoalim is the one most exposed to higher provisions because of its low coverage ratios and because of its overexposure to personal debts of controlling shareholders, such as Eliezer Fishman,” said analyst Terrence Klingman. Psagot, however, raised it rating for No. 4 lender Mizrahi-Tefahot Ban to Market Outperform from Market Perform. Shares of Leumi dropped 1.1% to 13.20 shekels ($3.37) and Mizrahi jumped 2.9% to 43.30. (Michael Rochvarger)

U.S. court foils Teva’s plans for Celebrex

Teva Pharmaceuticals’ plan to be the first out with a generic version of Pfizer’s best-selling drug Celebrex was foiled yesterday by a U.S. Federal Appeals Court. The court reversed a U.S. Food and Drug Administration bestowing 180-day marketing exclusivity on the Israeli drug maker for its generic version of Celebrex, which in its branded form enjoys sales of $2.6 billion a year. The move will put Teva in back of the first group of filers, includes Mylan and Actavis, and prevent it from bringing its version to market until June. The ruling is likely to take a toll on Teva’s 2015 sales, which the company warned last week would be less than $20.1 billion average that Wall Street analysts had predicted. Shares of Teva dropped 1.7% to end at 216.70 shekels ($55.37). (TheMarker Staff)

Speech Modules rallies on Comverse deal

Shares of Speech Modules jumped yesterday after the company revealed that its speech-recognition technology was being used by Comverse to let cellphone users convert SMSs and emails into voice messages. Comverse signed a three-year agreement giving it non-exclusive rights to Speech Modules’ technology September a year ago for use by its mobile and landline communications company customers. Speech Models said it would be paid based on the number of end-user subscribers who use the service, but no less than $2.5 million a year for adjusting the service to an additional language it is developing. For the existing language the service works with Comverse will pay a minimum of $500,000. Speech Modules jumped 22.4% to 21 agorot (5 cents). (Dror Reich)

Wall Street chases away Russian bear

The weight of Russia’s financial crisis and falling oil prices lifted toward the end of yesterday’s session for the Tel Aviv Stock Exchange, which ended with the TA-25 index 0.3% higher at 1,486.20 points. The TA-100 added 0.1% to 1,295.90 on turnover of 1.42 billion shekels ($360 million). Among blue chips, Delek Group climbed 2.9% to close at 1,142 shekels and The Israel Corporation 2.3% to 1,956, while Bezeq extended its rally with a gain of 1.7% to end at 7.06. “It’s really a mini-storm in the capital market but we’re not talking about a financial crisis,” said Yaniv Hevron, chief economist at Excellence. “Although risk remains it will pass quickly, oil prices will stabilize while low interest rates and excess liquidity will put a break on the deterioration we’ve been seeing.” (Dror Reich)