The Ticker/ Tel Aviv Shares Plummet Following Wall Street Sell-off

Teva to issue mandatory convertibles to help finance Allergan purchase; Caesarstone shares tumble after two directors step down/

Send in e-mailSend in e-mail
Send in e-mailSend in e-mail
The Tel Aviv Stock Exchange (TASE).
The Tel Aviv Stock Exchange (TASE).Credit: Bloomberg

Tel Aviv Stock Exchange shares ended down sharply yesterday following a long Sukkot holiday weekend, but the main indexes were off their lows for the day after U.S. stocks opened higher.

The benchmark TA-25 index fell 2.2% to a close of 1,490.08 points, while the TA-100 lost 2.3% to 1,302.63. Turnover was 1.37 billion shekels ($348 million). Trading ends at 2:30 P.M. every trading day this week, for Sukkot.

Tuesday’s declines were led by health care stocks, which suffered a big sell-off on Wall Street Monday. Opko Health tumbled 11.4% to 34.30 shekels and Perrigo 8.1% to 608.20. But there were big gainers, too. Alon Blue Square was the biggest gainer on the TA-100, adding 6.6% to finish at 2.60. EZchip Semiconductor rose 3.2% to 88.11 and Osem 2.8% to 75.50. ADO Group ended down 0.8% at 38.34, after saying last week it planned to pay a giant, 850-million-shekel dividend, subject to bondholders’ approval.

The government’s 10-year shekel bond ended down 0.22%, lifting its yield to 2.19%.  (Omri Zerachovitz)  

Teva's plant in Jerusalem.Credit: Bloomberg

Teva to issue mandatory convertibles to help finance Allergan purchase

Teva Pharmaceuticals plans to ask permission from the Tel Aviv Stock Exchange to issue mandatory convertible preferred shares to foreign investment funds, a move that will enable it to avoid excessive borrowing to fund its $405-billion acquisition of Allergan’s generics business without diluting earnings per share.

The convertibles don’t have voting rights, nor can they be traded, but they will entitle holders to a fixed dividend set out in the prospectus, even when other shareholders aren’t entitled to a payout. That advantage means that they can be sold at a premium to the market price of ordinary shares. They are convertible to ordinary shares after three years.

In related news, Teva said on Friday that it bought Gecko Health Innovations, a startup developing software to aid in managing respiratory diseases. Gecko’s Care TRx provides remote monitoring and adherence tools. Teva shares fell 5.2% to 226 shekels ($57.45). (Yoram Gabison)

Caesarstone headquarters on Kibbutz Sdot Yam, in 2012. Credit: Itzik Ben Malki

Caesarstone shares tumble after two directors step down

Shares of Caesarstone, a maker of quartz kitchen countertops, tumbled Monday and yesterday after two directors stepped down. They quit just over a month after short seller Spruce Point Capital Management issued a report accusing the company of misleading investors and inflating profits, among other things by putting less quartz in its countertops that its claims. Spruce said on Monday the resignations signaled that Caesarstone was “hiding something.”

The company played down the resignations, with chairman Maxim Ohana saying they “did not reflect differences of opinion as to the company’s business, accounting or public disclosures or concerns about any alleged wrongdoing.” It had previous denied the Spruce allegations.

However, the two resignations leave Caesarstone with less than the minimum percentage of independent directors required under the rules of Nasdaq, where its shares are traded. Shares of Caesarstone were trading at $30.92 in New York at mid-morning local time, down 17.6% so far this week. (Yoram Gabison)