The Ticker: Discount Bank Makes Offer to Buy Dexia and Merge It With Mercantile Unit

Strauss CEO stepping down due to illness ■ Ability shares plunge after SEC warns of possible legal action ■ Nano Dimension shares soar on China-distribution partnership

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A Discount Bank branch in the Cinema City complex in Jerusalem
A Discount Bank branch in the Cinema City complex in JerusalemCredit: Emil Salman

Discount Bank makes offer to buy Dexia and merge it with Mercantile unit

Confirming a report in TheMarker last April, Israel Discount Bank said on Monday it had approached Bank Dexia Israel about a merger with Discount’s wholly owned Bank Mercantile Discount subsidiary. “We believe the characteristics of Discount’s operations, its size and its abilities, and the special characteristics of Mercantile Bank are a good fit with Dexia’s unique operations,” Discount CEO Lilach Asher-Topilsky said in a letter to Dexia Chairwoman Levana Shifman proposing merger talks. Dexia, which has had no controlling  shareholder since Belgium’s Dexia sold its 59% stake in March, has shareholders’ equity of 670 million shekels ($184.6 million) as of March, which is likely the price Dexia shareholders will demand for the bank, said Dorin Zelnir-Palas, banking analyst at investment house IBI. She said Discount would probably pay in cash for Dexia because it has about 1 billion shekels in cash available. Discount shares ended up 2% at 11 shekels and Dexiz shares up 4.9% at 669.80. (Michael Rochvarger)

Strauss CEO stepping down due to illness

Gadi Lesin, who has led Strauss Group for the last nine years, will step down for medical reasons and be replaced by Giora Bardea on an interim basis, the company said on Monday. Lesin, 51, took a medical leave for three months in early May, during which time Bardea had been filling in for him. Since taking over as CEO in April 2009, Strauss has seen its sales of coffee, confectionaries and other food products climb by 36% to 8.5 billion shekels ($2.3 billion) last year while net profit grew 45% to 415 million. Strauss market cap more than doubled to 8.65 billion shekels over the nine years, as it became the biggest maker of roast and ground coffee in Brazil and the leading brand of hummus worldwide in a partnership with PepsiCo. Bardea previously served as deputy CEO of Strauss, the second-largest company in the Israeli food and beverage sector. Strauss shares finished down 1.7%% at 73.46 shekels. (Yoram Gabison)

Ability shares plunge after SEC warns of possible legal action

Shares of Ability, a maker of smartphone-hacking gear, plunged for a second day on Monday after it said the U.S. Securities and Exchange Commission was considering disciplinary action against it and controlling shareholders Anatoly Hurgin and Alexander Aurovsky. Ability said it received a “Wells” notice from the U.S. regulator concerning a previously announced investigation into the company’s 2015 merger with shell company Cambridge Capital Acquisition Corporation, which had enabled Ability to be listed on the Nasdaq. “A Wells notice is neither a formal allegation of wrongdoing nor a finding that any violations of law have occurred,” Ability said. “Rather, it provides the company and Messrs. Hurgin and Aurovsky with an opportunity to respond to issues raised by the SEC prior to any SEC decision to institute proceedings.” Ability has had a troubled history, including a crashing share price, board resignations and class action suits. Ability shares ended down 6% on Monday at 25.59 shekels ($7.05). (Yoram Gabison)  

Nano Dimension shares soar on China-distribution partnership

Shares of Nano Dimension soared on Monday after the maker of 3D printers used in the electronics industry said it had formed a strategic partnership with China’s Aurora Group. Aurora, a provider of 3D software and distributor of 3D printers, will market and sell Nano Dimension’s DragonFly 2020 Pro 3D printer for electronics to customers in China and will purchase a second DragonFly printers for its own use.  Already selling in Hong Kong, South Korea, Singapore and Taiwan, Nano Dimension said the partnership expands its Asia-Pacific market to the region’s largest 3D-printer market. “China is one of the world’s largest and most important electronics manufacturing and design markets, and establishing the correct foothold in the market is key for Nano Dimension.” said CEO Amit Dror. Aurora has a network of 1,500 offices and 300,000 customers, including more than 3,000 in electronics, he added. Nano Dimension shares ended up 12.1% at 1.70 shekels (47 cents). (Guy Erez)
Banks take Tel Aviv Stock Exchange higher
Bank shares led the Tel Aviv Stock Exchange higher on Monday even though expectations for interest rate rises by the Bank of Israel were dashed late in the day (see story on this page). The benchmark TA-35 index closed up 0.3% at 1,535.22 points, while the TA-125 added nearly 0.2% to 1,372.40, on light turnover of 854 million shekels ($235 million). Bank Leumi rose 1.4% to 22.50 shekels and Mizrahi Tefahot Bank climbed 1.3% to 68.71, despite central bank governor Karnit Flug’s signal of only a minimal rate rise before the end of 2019. Telco stocks were lower, with Bezeq dropping 2.9% to 3.94 and Electra Consumer (Golan Telecom’s parent)  falling 5.3% to 36.14. Enlight rose 3% to 1.83 after it secured 525 million shekels in financing from Bank Hapoalim to build Israel’s largest wind energy project. Pluristem gained 2.8% to 4.67 after reporting it had entered into a strategic collaboration with Thermo Fisher Scientific to advance knowledge of cell therapy industrialization. (Guy Erez)