The Ticker: Top Mylan Executive in Israel to Pitch Perrigo Bid

12.2% of TASE companies have ‘going concern’ warnings; Hamat in talks to build Turkish plant; PhotoMedex sells unit to repay banks.

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TASE CEO Yossi Beinart
TASE CEO Yossi BeinartCredit: Ilan Assayag

John Sheehan, Mylan’s chief financial officer, will meet on Wednesday with the head of the Tel Aviv Stock Exchange and local institutional investors as the U.S. drug maker brings its public relations campaign to buy Perrigo to Israel. Mylan is fighting off Teva Pharmaceuticals’ offer to buy it in part by buying Perrigo, which could make Mylan unpalatable for Teva. But Perrigo has rejected Mylan’s $34 billion cash-and-share offer. Sheehan will reportedly tell TASE CEO Yossi Beinart that Mylan will list itself on the TASE if it buys Perrigo – important news for Beinart, who is trying to boost liquidity on the bourse. After Teva, Perrigo is the largest company in the TASE’s benchmark TA-25 index. Sheehan will also make his company’s case for buying Perrigo in front of three major Israeli shareholders in Perrigo - Migdal Insurance, the Amit pension fund and Menorah Insurance.

12.2% of TASE companies have ‘going concern’ warnings

The percentage of Tel Aviv Stock Exchange-traded companies carrying a “going concern” warning edged down to 12.2% in the first quarter from 12.7% in the final three months of 2014, but the rate is still three times higher than it was in 2008, the business-credit company CofaceBDI said on Tuesday. A going concern warning is attached to a company’s financial report when its auditors believe the company is at risk of failing, a designation that 70 TASE companies suffered in the quarter. “We saw some improvement in the last two quarters but the improvement is still not significant,” said Tehila Yanai, co-CEO. “One of out of every eight companies is at risk of collapse, a very high figure historically.” Biomed companies had the highest rate of warnings, rising to 36% of the total from 32% in fourth-quarter 2014. Property companies were next, with 16%, and investment/holding companies following, with 14%, CofaceBDI said.

Hamat in talks to build Turkish household ceramics plant

Just days after a reported meeting between top Israeli and Turkish Foreign Ministry officials, household manufacturer Hamat said on Tuesday it had begun talks with its Turkish supplier about building a plant to begin making its kitchen and bathroom ceramics near the city of Izmir. Hamat said it would hold 80-90% of the joint venture and that its board had already approved purchasing a site for 10 million shekels ($2.65 million) Plans to hook up Hamat’s Negev plant to Israel’s natural gas grid, which would save it significant energy costs, have been repeatedly delayed, forcing it to weigh a move abroad. The company said a Turkish plant would reduce costs 30-40%, helping it to compete in global markets and produce a wider range of products. Shares of Hamat, which reported a small loss on its ceramics business in the first quarter, ended unchanged at 12.53 shekels.

PhotoMedex sells unit to repay banks

PhotoMedex said Tuesday it sold its Xtrac and Vtrac psoriasis and vitiligo treatment businesses to Mela Sciences for $42.5 million in cash, a move that removes the weight of bank debt for the company but also loses it its chief growth engine. PhotoMedex said it used the proceeds of the sale to pay off all its outstanding debt, which totaled $40.1 million as of June 22, to a group of banks led by Morgan Stanley. “PhotoMedex is now able to focus solely on our core consumer and skincare businesses without the burden of debt payments and the restrictions of forbearance agreements,” said CEO Dolev Rafaeli. Xtrac and Vtrac generated $5.4 million in revenues in the first quarter, a 33% increase from a year earlier while its core business saw revenue declines. PhotoMedex shares jumped 14.8% to 7.44 shekels ($1.97).

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