Daily Roundup / Perrigo Pounded on Goldman '0% Upside'

Storm reaches the supermarkets; Ratio chairman sells off units; Intel says Israir class action is groundless.

No joy foreseeable from Perrigo? Perrigo shares took a pounding Sunday on the Tel Aviv Stock Exchange, closing an arbitrage gap with Wall Street and losing more than 6% after Goldman Sachs advised investors to sell the stock on Friday. The New York investment bank also lowered its 12-month target for the dual-listed drug company from $117 to $110. Analyst Jami Rubin wrote that he sees "0% upside" in the next 12 months for Perrigo, which makes over-the-counter drugs. Street guru Jim Cramer presumably didn't help when he commented that investors were piling into Perrigo because of the influenza making the rounds, but that's a blip, he cautioned.

Pigging out on produce? Even though the storm that hammered the Middle East last week didn't cause any shortages of vegetables or fruit, Israel's retailers took the opportunity to jack up prices of fresh produce by double-digit percent. Farmers' rep Dubi Amitai claims the hikes don't originate with them, though crops were damaged by the high winds, and heavy rain and snow: it's the retailers being greedy, he says. The retailers deny being pigs and rebut that their cost of sales on fresh produce don't begin and end with what they pay farmers: On top of that one must add packaging, transportation, refrigeration, manpower and so on. Farmers want government supervision over retail prices of produce and meanwhile, an executive at one of the heavy discount chains claims the big retailers are indeed being pigs.

Ratio Oil chairman exits most of his stake: Yigal Landau, chairman of Ratio Oil Exploration, on Thursday sold 1.1% of the partnership's units to the Phoenix insurance group in an off-floor transaction for NIS 28 million, and made quite the killing: the units had gained about 50% in the last year. Phoenix got the units at a 0.6% discount to their price on the Tel Aviv Stock Exchange on Thursday. Landau still owns 0.55% of Ratio's participation units. So why did he (and his father) sell? They got an offer; and note that while owners may tend to exit if they feel the upside isn't there, last week two investment houses – DS Apex and UBS – upgraded their ratings of Ratio stock.

Israir class-action baseless, IDB claims: IDB Holding Corp, the company at the top of the IDB business pyramid, says the class-action motion against it for buying a tourism company from its own owner is baseless. The claim is that it made no sense for IDB group company IDB Development Corp to have bought Ganden Aviation and Tourism from the group's controlling shareholder Nochi Dankner: if anything the transaction caused it damage in the range of NIS 360 million to NIS 480 million, the class-action motion claims. If it did anybody good, it was only Nochi Dankner and his partners, claims the plaintiff: they were relieved of $43 million in personal guarantees. IDB says the claim is baseless and the stated damages were inflated. They note that the process of approval by company organs lasted a full six months and provided third-party evaluations to shore up their argument.

Intel outside: Intel recently exported $3 billion cash made by its units in Israel, on which it paid dividend tax of 15% - in other words $450 million. Sources near the company's negotiations with the state note that's the normal rate of dividend tax, in other words the chipmaker didn't get a discount. The company's talks with top treasury officials in 2012 had been kept secret; ultimately Intel paid the tax in two installments at the end of last year. On top of that, last year Intel paid $133 million on $450 million "passive profits" - profits that the company reinvested, on which the tax rate is 30%. Note that Intel is still believed to be sitting on some $5 billion in trapped profit. If it decides to export it, to use that money outside Israel, it will be liable for 15% dividend tax on that amount too.

Delek repaying loan early: To lower its financing costs, energy and property conglomerate Delek Group repaid a $150 million loan taken in mid-2012 from UBS before time. The loan had been taken by group company Delek Infrastructures, which had agreed to pay high interest of Libor plus 4.75%.

With reporting by Michael Rochvarger, Ora Coren and Adi Dovrat-Meseritz and Yoram Gabison

Emil Salman