Business in Brief: Tel Aviv Shares End Lower After Holiday Weekend

Yokohama Rubber buys Alliance Tire for $1.2 billion; Bank Leumi divesting remaining JEC stake; IDB Development finances still shaky despite cash infusions; Zim widens loss by four-fold amid slower world trade.

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

Yokohama Rubber buys Alliance Tire for $1.2 billion

Japan’s Yokohama Rubber Company said on Friday it had agreed to buy Alliance Tire Group, an Indian company with substantial operations in Israel, for about $1.2 billion in a bid to expand its commercial tire business. The sellers are the U.S. private equity firm KKR & Company, which owns 90% of Alliance after buying its stake in 2013 for a reported $500 million, and India’s Mahansaria family, which controls the rest. Alliance was sold by Eliezer Fishman in 2007 to the Mahansarias and the U.S. private equity Warburg Pincus, which in turn sold its stake in KKR six years later. The Japanese company said in a statement it would buy all the shares of Alliance, which is domiciled in The Netherlands, in a deal it said it expected to close on July 1. Alliance specializes on off-road tires used in farm and forestry vehicles, which will help Yokohama, the world’s eighth-largest tire maker, diversify from the automotive sector. (Uri Tomer and Dafna Maor)

Bank Leumi divesting remaining JEC stake

Bank Leumi is divesting the last of its shares in Jerusalem Economy in a move that will leave Summit Real Estate as JEC’s biggest shareholder. The bank, which holds the share as collateral against 2 billion shekels ($520 million) in unpaid loans to Eliezer Fishman, has agreed to sell half its remaining 13.1% in JEC to Summit for 100 million shekels and the rest to institutional investors at 6.22 shekels a share. Summit emerged as a major JEC shareholder at the end of February when in a surprise move it snapped up a 16.6% stake via public tender at 5.91 shekels a share, or a combined 245 million shekels. The Leumi shares will boost its holding to just under the 25% level where securities regulations would require Summit to make a general offer for all JEC shares. Summit also faces business concentration rules that would block it from acquiring control of JEC. Summit shares ended up 1.2% to Sunday to 19.64 shekels.  JEC ended up 0.9% to 6.28. (Michael Rochvarger)

IDB Development finances still shaky despite cash infusions 

Fourth-quarter financial results for IDB Development Corporation released on Friday show that after two years and some 2.1 billion shekels ($550 million) in cash infusions to the indebted holding company have done little to improve its finances. IDB lost 353 million shekels attributable to shareholders in the quarter. Although that was down from 785 million a year ago, the company now has shareholders’ equity of just 131 million shekels at the end of 2015. Controlling shareholder Eduardo Elstzain is planning to take IDB Development private just two years after restoring it to Tel Aviv Stock Exchange trading and then seeing its share price fall 54%. Its bonds are trading at yields of 25% amid doubts about management and confusion over what the strategy is for the company and its subsidiaries, which include Cellcom Israel, Super-Sol and Clal Insurance. IDB shares closed up 0.8% to 2.11 shekels on Sunday. (Michael Rochvarger)

Zim widens loss by four-fold amid slower world trade

Zim Integrated Shipping Services saw its loss grow four-fold in the fourth quarter from a year ago to $28 million amid shrinking world trade and worldwide shipping overcapacity. Revenues declined 15% to $687 million in the quarter, the company said on Thursday. Although Zim carried 590,000 TEUs (twenty foot equivalent units, the unit of the capacity of a container ship) in the quarter, a 5% increase, shipping rates dropped 21% to an average of $988 per TEU. Zim posted an operating loss of $5 million, turning around from a profit of $5 million a year earlier. Pointing to a 40% decline in an index of shipping rates in the first quarter Zim CEO Rafi Danieli said the world shipping market isn’t showing any signs of rebounding. Shares of Kenon Holdings, whose stake in Zim was cut to a 32% after a debt bailout, declined 0.3% to 29.13 shekels ($7.60). (Yoram Gabison)

Shares end lower after holiday weekend

Tel Aviv shares ended lower on Sunday in light trading after a long Purim holiday weekend. The TA-25 finished down 0.7% to 1,484.98 points, while the TA-100 lost nearly 0.8% to 1,267.79, as just 434 million shekels ($113.2 million) in shares changed hands. Elbit Systems topped the most actives, dropping 2.8% to 360 shekels amid doubts it will win the tender to buy the government’s Israel Military Industries. Africa Israel Investments dropped 5.7% to 1.94. Jittery investors are still awaiting the real estate company’s 2015 financial results three weeks after it issued a profit warning. Ability lost 4% to 24.11 after it notified the market that the Nasdaq would delist its shares from March 30 after the stock failed to meet its minimum requirements. Teva Pharmaceuticals was down 1.4% to close to 208.20 and Rami Levy lost 1.3% to 156.20 after the brokerage house Excellence warned the supermarket chain faced lower sales on a per square meter basis and profits. (Shelly Appelberg)