Business in Brief: Shellanoo Announces Plans to Ax Half Its Workforce After Canceling IPO

Menora Holdings acquires stake in payment processor ERN for $26.7 million; Magal shares drop sharply on rights offering; Tel Aviv shares follow Europe, Wall Street lower.

Stock prices flash on an electronic screen displaying world clocks at the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, Dec. 11, 2014.
Bloomberg

Shellanoo announces plans to ax half its workforce after canceling IPO

Shellanoo Group, an Israeli high-tech holding company, said Thursday it was laying off half of its 60 employees. On Wednesday the company canceled plans to raise 200 million shekels ($53.3 million) in an initial public offering. “Following the media frenzy and the decision to cancel the offering, the company is adopting an efficiency plan while at the same time acting to develop businesses for the future,” Shellanoo said. The company, which was founded by Oded Kobo and backed by Russian oligarch Roman Abramovich, had valued itself at 700 million shekels for the IPO, arousing sharp criticism because it had no revenues and costs that reached $15 million in the first half. Its auditors had attached a “going concern” warning on its financial reports. The valuation, prepared by the accounting firm BDO, forecast the company’s portfolio of apps in development would generate $20 million in revenue next year. (Omri Zerachovitz)

Menora Holdings acquires stake in payment processor ERN for $26.7 million

Menora Holdings, the parent company of the insurer of the same name, said Thursday it had paid 100 million shekels ($26.7 million) for a 40% stake in ERN and took an option to increase the holding later. Acquiring ERN, which clears checks for businesses instantly and accepts the risk they will bounce, is part of Menora’s strategy of expanding out of its traditional capital markets focus. “We see credit and finance as growth engines that will diversify the group’s revenue sources,” said Menora CEO Ari Kalman. “This acquisition is part of this strategy and complements our becoming a partner this year in Ampa Capital, which operates in the business credit sector.” Menora acquired 30% of Ampa Capital for 63 million shekels in January. ERN, which was founded by Rony Natanzon in 2001, works with 15,000 businesses and clearing some 5 billion shekels of checks annually. Menora shares ended down 0.5% at 31.63 shekels. (Assa Sasson)

Magal shares drop sharply on rights offering

Shares of Magal, which makes high-tech security fences, tumbled after the company announced a $24-million rights offering Thursday. Magal said investors holding shares as of September 9 could purchase until September 30 three ordinary shares at a subscription price of $11.58, or $3.86 each, for each share they own now. In addition, they are entitled to buy any additional shares not taken up by their fellow investors. FIMI, the Israeli private equity fund that holds a 40% stake in Magal, will buy into the rights offering and may exercise its oversubscription rights as well, but would not let its voting rights in the company exceed 50%, Magal said. The company is counting on more business amid waves of immigration and concerns about terrorist infiltration in Europe and the United States. Magal shares were down 6.1% at $4.50 in late morning New York time. (Yoram Gabison)

Tel Aviv shares follow Europe, Wall Street lower

Tel Aviv shares followed Europe and Wall Street lower Thursday. The TA-25 and TA-100 indexes both ended down about 0.2% at 1,458.46 and 1,279.17 points, respectively, on turnover of 1.02 billion shekels ($270 million). Bezeq fell 2.1% to 7.41 shekels and was the most active share of the day. Insurance stocks were also sharply lower, with Harel down 1.2% at 14.08 and IDB Insurance falling 1.5% to 180.40. Biomedical stocks were higher, with three companies showing especially big gains — Navidea, up 19.67% to 3.33, Biotime ahead 9.9% to 62 agorot and Kitov Pharma ahead 15.8% at 12.55. The big exception was Compugen, which was the biggest loser among TA-100 stocks Thursday, dropping 2.5% to 26.21. Housing & Construction lost 2.3% to 6.41 and Shapir Engineering 1.7% to 7.70.  In foreign currency trading, the dollar fell to its lower in more than four months, weakening 0.45% to a Bank of Israel rate of 3.7490 shekels. (Uri Tomer)