The Ticker / U.S. Court Denies Perrigo Bid to Block Mylan

Bond sales up 25% so far in year from 2014; EZchip wins backing for Mellanox takeover; Tel Aviv shares end mixed despite rally in energy, telecom stocks.

Outside of the Tel Aviv Stock Exchange.
Bloomberg

U.S. court denies Perrigo bid to block Mylan

Mylan said on Friday that a U.S. federal court denied a request by Perrigo to block the closing of any tender offer filed by Mylan. Perrigo, which is resisting Mylan’s $25-billion offer, had in September sought an injunction to block the closing of any tender offer unless Mylan corrected what Perrigo said were misleading statements about potential synergies and false claims of the power to delist Perrigo shares, in an effort to strong-arm acceptance of the tender offer. But the U.S. District Court for the Southern District of New York ruled that Mylan had provided adequate public disclosures about the savings expected from a possible combination of the two companies. It was a second legal setback for Perrigo, after an Israeli court allowed Mylan to list its shares on the Tel Aviv Stock Exchange, which is expected to help coax Perrigo’s Israeli shareholders to back the deal. Perrigo shares slumped 4.5% to end at 611.40 shekels ($158.19). (Reuters)


Bond sales up 25% so far in year from 2014

The Israeli bond market is poised to mark a banner year, with corporate borrowers raising a combined 48 billion shekels ($12.4 billion) in the first 10 months, 25% more than the same period in 2014, the Standard & Poor’s Maalot credit rating agency reported yesterday. October alone saw bond issuers raise 4.8 billion shekels, it said. Financial institutions accounted for the largest segment at 20 billion shekels, double the 2014 figures. S&P Maalot CEO Ronit Harel Ben-Zeev said banks were turning to the bond market to take advantage of record low interest rates and regulatory barriers to raising money from other sources. Real estate firms were another big source of growth, raising 16 billion shekels so far, a 23% increase over 2014. U.S. property companies accounted for nearly 20% of the total, Harel Ben-Zeev said, adding that she expected the trend to continue into 2016. Other categories of corporate borrowers, however, pared back their bond sales this year by about 3%. (Eran Azran)


EZchip wins backing for Mellanox takeover

Mellanox’s takeover bid for EZchip won backing over the weekend from ISS, a shareholder’s advisory service that termed the $25.50 cash offer a “reasonable valuation.” ISS warned of the potential downside to EZchip if it remained independent, citing the company’s loss in May of a key contract from Cisco Systems for NPS-400 technology. “.We note that revenues from Cisco generate a gross margin of close to 100% for EZchip, having a disproportionate impact on profitability. As such, the company was facing a turning point and it does not appear unreasonable that it started a sale process,” ISS said. New Jersey-based Raging Capital, whose 6.5% stake makes it one of the largest shareholders of EZchip, has come out strongly against the takeover and over the weekend reiterated its opposition. Shares of EZchip, whose shareholders will vote on the offer November 12, dropped 1.1% to close at 93.42 shekels ($24.17). (Omri Zerachovitz)


Tel Aviv shares end mixed despite rally in energy, telecom stocks

Tel Aviv shares ended mixed yesterday, with telecom (see story on this page) and energy shares rallying while heavyweights Teva Pharmaceuticals and Perrigo ended lower. The benchmark TA-25 index edged up 0.06% to a 1,574.41-point close while the TA-100 lost 0.2% to 1,363.15. Turnover was a relatively heavy 663 million shekels ($171.5 million). Energy shares were boosted by the resignation of Economy Ministry Arye Dery, to clear the antitrust obstacle to final approval of the gas framework. Avner rose 5.9% to 2.70 shekels and Ratio gained 3.21% to 30 agorot, both in heavy trading. But Teva dropped 2.6% to 230.90. Israel Chemicals shed 1.3% after Standard & Poor’s Maalot lowered its credit outlook to Negative from Stable, citing a likely decline in potash prices next year. Two companies in financial hot water extended their losses: Jerusalem Economy Corporation fell 11.5% to end at 6.709 shekels and Alon Blue Square, which controls food retailer Mega, fell 4.2%. (Eran Azran)