Daily Roundup / Where a 3-room Apartment Costs $2.6 Million: Tel Aviv

Clal Biotech moving to delist shrunken subsidiaries; Cash-strapped Financial Levers not stinting on next CEO.

Ruth Schuster
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Ruth Schuster

3-room Tel Aviv apartment changes hands for $2.6 million: A 3-room apartment not yet built is changing hands for the stunning sum of NIS 9.8 million. According to this morning's exchange rate, that's equivalent to $2,625,000. The apartment in question is in Mayer Tower, which is in the process of construction on Rothschild Boulevard, roughly the costliest area in Tel Aviv. The dwelling is, or will be, on the 18th of the tower's 37 floors. It may have only three rooms but they're monsters, with total floor space of 196 square meters. The flat also sports a 12.5-square meter porch facing north-east. The buyer is an Israeli internet entrepreneur, who may take possession in a year and a half, when the building should be ready.

Clal Biotechnology trying to absorb subsidiaries: Holding company Clal Biotechnology has offered to buy out its fellow shareholders in portfolio companies D-Pharm and Biocancell, both of which are also listed for trade. D-Pharm is developing drugs for the central nervous system. Biocancell is developing targeted drugs for cancer. Clal Biotechnology owns 53% of D-Pharm and 70% of Biocancell, and is proposing mergers through stock swaps, after which the two companies would be delisted from the Tel Aviv Stock Exchange. The purpose of the exercise is to streamline operations, reduce costs and reduce the management attention the parent company has to devote to the kids, which constitute a rather small part of its total investment portfolio.

So how well have the subsidiaries done? D-Pharm started trading today at a market cap of NIS 29 million, after having lost 94% of its value this year. That is because its third and crucial clinical trial of its drug under development, DP-b99, to treat stroke, flopped. Biocancell is trading at a shrunken market cap of NIS 43 million after having gained 76% on Monday. Why did it gain 76% on Monday? Possibly because of leaked information about Clal Biotechnology's merger intentions. Or maybe it was that, together with the news report Monday morning that Biocancell would be announcing the results of its Phase II tests of a bladder-cancer treatment ahead of schedule. Be that as it may, Clal Biotechnology may feel that the millions of shekels keeping these two companies listed for public trading isn't worth it, and that their emaciated market values are creating difficulty attracting new partners to them.

Financial Levers short on money, next CEO may be rather less so: Moti Friedman, chairman of the Israel Electric Corp from 2007 to 2010, has been tapped to manage Financial Levers (Manofim Financi'im). If the company's shareholders approve his appointment at the general assembly in February, Friedman will succeed incumbent CEO Yoel Bismut, who suddenly announced his resignation two months ago for "personal reasons". Financial Levers is offering Friedman the princely salary of NIS 160,000 a month (nearly $43,000), which is NIS 1.9 million a year, and the same sum again as a profit-tied bonus - NIS 1.8 million a year. At present the company's cash position is rather withered: it has NIS 1.3 million (solo, not consolidated) and has been burning up NIS 3 million per quarter.

With reporting by Yoram Gabison, Nimrod Bousso and Oren Freund.

Rothschild Blvd.Credit: Tomer Appelbaum
Moti Friedman, former IEC chairman and maybe Financial Levers' next CEO.Credit: Ofer Vaknin