Israel Corp. spin-off starts trading on TASE
Shares of Kenon Holdings, which was formally spun off from the Israel Corporation last week, debuted on the Tel Aviv Stock Exchange on Sunday with a 6.5% rise in moderate trading. Kenon, which takes under its wing Zim Integrated Shipping Services, AC Power (100%), TowerJazz Semiconductor, IC Green Energy and the Chinese auto-making joint venture Qoros, closed on 77 shekels ($19.45). That was a more auspicious start than Kenon had on the New York Stock Exchange, where its shares fell 1.5% to $18.61 on Friday. The split leaves Israel Corp. with two mostly domestic holdings – Israel Chemicals and Oil Refineries Limited. Israel Corp. shares rose 1.9% to 1,400 shekels, leaving it with a market cap of 14.5 billion shekels, 30% less than what it was before the split. Both Kenon and Israel Corp. have places on the TA-25 index for now.
Migdal moving forward with giant placement
Migdal Insurance is getting ready for a giant 1 billion-shekel ($253 million) private placement of bonds, sending an early draft of the terms to institutional investors this week, TheMarker has learned. The insurer plans to issue the bond to institutions by the end of the month and, within the following six months, register them for public trading on the Tel Aviv Stock Exchange and publish a prospectus. Sources said Migdal will be offering debt with an average term of 7.3 years. The interest rate will depend on whether the bonds end up being publicly traded or not; if not, the rate will be 30 basis points higher. The issue also includes a step-up clause that awards holders 50% of the difference between the Migdal bonds and equivalent government bonds from the date of the issue. The bond sale will be the third in two years after two sales totaling 1.2 billion shekels in 2012.
UBS cuts target prices for gas shares, but says most are Buys
Investment bank UBS cut its target prices for all the Leviathan and Tamar offshore gas field partners on Sunday by as much as 30%, but awarded most of them Buy recommendations. UBS’ move follows the sharp drop in the partners’ shares since Antitrust Commissioner David Gilo said he was voiding an agreement to let the partners act as a cartel. UBS analyst Roni Biran said the decision cast doubt about how long it would take to get the Leviathan field into production, reducing its value and what price its gas would be sold at. As a result, Biran said that in the worst-case scenario, Leviathan is worth just $5.6 billion and Tamar $11.2 billion. Setting target prices at his medium-case scenario, Biran said Avner’s share now had an upside potential of 24.3%, Avner 22.9% and Ratio 30.8%. But for Isramco he put the upside at just 3%, and for Delek Group at 13%, thus rating them Neutral.
Alcobra raises another $26 million
Even though its share price is down nearly 80% after a trial for its attention deficit hyperactivity disorder (ADHD) drug was deemed a failure, Alcobra over the weekend raised $26 million in a secondary offering of shares. Investors paid $4 each for the shares, a 5% discount on its Thursday close, but they ended up with a bargain: Alcobra stock jumped 24.5% to $5.29 by the end of trading on Friday. Alcobra said it will use the net proceeds to fund further clinical development of its MDX ADHD treatment. The sale is the second since Alcobra went public in May 2013. Even with the Friday rally, Alcobra shares are still down from the $8 they debuted at in their IPO.
Tel Aviv shares end lower
Tel Aviv shares ended lower on Sunday, led by Teva Pharmaceuticals and real estate stocks with Russian exposure. The benchmark TA-25 index lost about 0.25% by closing, to end at 1,465.79 points, while the TA-100 was down 0.3% at 1,286.74, with a mere 485.8 million shekels ($123 million) in shares changing hands. Teva dropped 2.5% to close at 224.20 shekels, while property companies tumbled – Africa Israel by 2.2% to 3.61 shekels, Jerusalem Economy by 1.9% to 11.89, and its Industrials Buildings Limited unit by 2.1% to 4 shekels. Among gainers, Nova posted a 6.3% rise to end at 44 shekels after Needham & Company and Singular Research both recommended the stock. Intec Pharma dropped 13.4% to a 50-agorot close on news that Impax Laboratories won U.S. approval for its rival Parkinson’s disease treatment.
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