Business in Brief / Teva Secures $33.75b Loan for Allergan Deal

Israeli Securities Authority warns investors about algorithmic trading; Stratasys shares sink on disappointing outlook; Shares rise gently in thin trading.

Teva's headquarters in Jerusalem.
Bloomberg

Securities agency warns investors about algorithmic trading

Concerned about lax regulation and the growing number of investors being hit by big losses, the Israel Securities Authority on Sunday cautioned against algorithmic trading. Algo or robotic trading uses electronic platforms to buy and sell financial instruments according to preprogrammed trading instructions. “Many groups are conducting these operations without a license for managing investment portfolios in violation of the law,” the ISA said. “It should also be noted that even a license to operate a trading platform or to advise or sell investments isn’t a license to conduct [algo trading] operations.” The ISA warned against using a financial services firm solely through an online account because of the difficulty of determining the firm’s operators, professional credentials and possible conflicts of interest. “This anonymity is likely to be exploited for criminal purposes, including money laundering, illegal financial activities and to finance terror,” the agency said. (Shelly Appelberg)  

Teva secures $33.75b loan for Allergan deal

Teva Pharmaceutical Industries said over the weekend it had secured loans of $33.75 billion from a group of global banks for its $40.5 billion purchase of Allergan’s generic drugs unit. “With this commitment, we have secured financing for our proposed acquisition of Allergan’s generic pharmaceuticals business,” Teva Chief Financial Officer Eyal Desheh said. “We appreciate the strong support we received which stems from the compelling economics of this transaction.” Lenders include Bank of America Merrill Lynch, Barclays Bank, BNP Paribas, Citi, Credit Suisse, HSBC, Mizuho Bank, Morgan Stanley Senior Funding, RBC Capital Markets and Sumitomo Mitsui Banking Corporation. Some  $27 million of the loans will be in the form of a senior unsecured bridge loan credit facility and the rest as an equity bridge loan credit facility. Teva, whose share price reached a historic high last week on the Tel Aviv Stock Exchange, ended down 1.5% on Sunday at 260.60 shekels ($69.06). (TheMarker)

Stratasys shares sink on disappointing outlook

Stratasys shares sank after the Israeli-U.S. maker of 3-D printers reported disappointing earnings over the weekend. The company said third-quarter net profit would be between 3 and 13 cents a share on revenue in a range of $175 million to $190 million, well below the 47 cents and $217.2 million analysts polled by FactSet predicted. For the second quarter, Stratasys beat analysts’ expectations, with net down to $8 million, or 15 cents a diluted share, from $28 million, or 55 cents, a year ago. The average estimate of 11 analysts surveyed by Zacks Investment Research had been for 13 cents. “We are observing signs of recovery in certain regions . However, we expect the Asia-Pacific region as well as sales at MakerBot to remain a headwind for the duration of the third quarter,” Chief Financial Officer  Erez Simha told analysts. Stratasys shares closed down 5.9% at $30.73 on Friday in New York. (TheMarker)

Shares rise gently in thin trading

Tel Aviv shares ended the first trading day of the week for slightly gains on very thin trading. The market was broadly up, with biotech the only sector to finish lower, but the benchmark TA-25 index ended the day with a gain of just 0.1%, to 1,714.59 points, while the broader TA-100 index edged just 0.06% higher, to 1,479.43. Turnover was a paltry 448.2 million shekels ($117.1 million). NICE Systems led gainers on a rise of 3.7%, to 243.60 points, after reporting strong second-quarter earnings last week. Bezeq rose 1.7% to close at 7.70 shekels, but Israel Chemicals declined 1.5% to 25.69 and Frutarom lost 1.2% to 157.10. In the fixed-income market, the government’s Shahar bond rose 0.5% to trim its yield to 2.27%. Shapir Engineering elicited orders of 915 million shekels from the 303 million institutional tranche of its bond issue. (Shelly Appelberg)