Business in Brief: Tel Aviv Shares End Sharply Higher

Foreign merger and acquisition deals jumped 71% in 2015 to $6.5 billion; 3 banks to post gains from Visa Europe sale; Utrade provided trading services to Arab clients, ex-employee alleges.

Bloomberg

Foreign merger and acquisition deals jumped 71% in 2015 to $6.5 billion

Foreign investors did $6.5 billion in mergers and acquisitions in Israel this year, up 71% from 2014, a study by accounting form PwC Israel released Sunday said. Although the number of M&A transactions fell to 96 from 103 last year, their average value climbed by 64%, led by two giant deals – the 8.6 billion-shekel ($2.2 billion) sale of Tnuva to China’s Bright Food and the $1.25 billion sale of Fundtech to the Canadian financial technology company DH. Liat Enzel-Aviel, head of advisory services at PwC Israel, attributed the increase to the global low interest rate environment and well as confidence in the Israeli economy. Regarding the startups that account for a lot of M&A activity, she said, shareholders were showing more patience in holding on to the companies longer before selling, thereby increasing their value. As a result, M&A deals should keep growing in size. M&A by Israelis abroad grew an even sharper 174% this year to $5.2 billion, led by Teva Pharmaceuticals’ $3.4 billion purchase of Auspex. (Omri Zerachovitz)

3 banks to post gains from Visa Europe sale

Three Israeli banks are expected to enjoy hundreds of millions of shekels in gains after Visa Incorporated of the U.S. buys back its former subsidiary Visa Europe. Under terms reached in November, Visa will pay 21.2 billion euros ($23.4 billion) for Visa Europe after eight years as separate companies. The transaction includes 16.5 billion euros in cash and shares now and up to 4.7 billion euros in four years. For Bank Leumi, which holds shares in Visa Europe through its Leumi Card unit, the payout could reach 368 million shekels ($94.8 million) in cash and shares during 2016 and perhaps as much as another 105 million later. Israel Discount Bank and First International Bank of Israel stand to gain as well through their combined holding Visa CAL. Discount will get 272 million shekels now in cash and shares and 75 million later while FIBI stands to get 107 million now and 30 million later. (Michael Rochvarger)

Utrade provided trading services to Arab clients, ex-employee alleges

Utrade, the options and foreign currency trader now in bankruptcy proceedings, is alleged to have provided services to citizens of Arab countries in violation of the law, a former employee of a sister company told TheMarker. The employee, who spoke on condition of anonymity, said Utrade provided online trading and binary option services to Arab client through two Cypriot-based companies, Option Now and Capital Option, that in fact operated in Tel Aviv. “We had a few Arab clients from the Gulf, Abu Dhabi, Saudi Arabia, Egypt, Lebanon, Jordan and Bahrain. We told them we were based in London. We never told them that we’re talking from Israel.” Utrade was shut last week after the Israel Securities Authority petitioned Tel Aviv District Court following its discovery that client accounts that were supposed to have 48 million shekels ($12.4 million) in them in fact had only 300,000 shekels. (Shelly Appelberg)

Tel Aviv shares end sharply higher

Tel Aviv shares posted strong gains in heavy trading Sunday. In gains that encompassed almost the entire market, the TA-25 index and the TA-100 both rose 1.1% to close at 1,533.85 and 1,321.85 points, respectively, as 839 million shekels ($216.1 million) in shares changed hands. Among blue chips, Israel Chemicals jumped 3.6% to end at 17.67 shekels after reports it was in talks to expand its phosphate mining license in Britain to 2060. Evogene added 8.2% to 30.86 and El Al Airlines 6.2% to 2.86, while Frutarom rose 2.1% to 200.70 shekels. TowerJazz fell 1.2% to a close of 57.43. In the fixed-income market, the government’s 10-year Shahar bond rose 0.49% to lower its yield to 2.08%. Its 10-year Galil inflation-linked bond also rose 0.49% to yields at 0.55%. Halm-Aldubi said in a report Sunday that despite deflation, it did not expect the Bank of Israel to lower its key lending rate anytime soon. (Shelly Appelberg)