Business in Brief: Space Communications Share Soar on Offer From Discount Investment Corp

Farmers get in on cannabis firms’ share rally ■ Rami Levy expected to exercise option to buy control of Cofix ■ Earnings improvement at Israel Aerospace ■ Gains on the TASE led in part by insurance stocks

A stock market ticker displays financial information and world time zones in the lobby of the Tel Aviv Stock Exchange, August 4, 2016.
Bloomberg

Shares of Space Communications closed up 14.28% on the Tel Aviv Stock Exchange on Tuesday, at 15.85 shekels ($4.54), after Discount Investment Corp. announced that it has offered to buy the 54.7% stake in Space Communications held by Eurocom for 160 million shekels ($46 million). In addition, Discount would inject up to 40 million shekels in capital in Spacecom, which operates the Amos communication satellites. 

The offer is subject to completion of due diligence and regulatory approvals. Eurocom’s stake in Spacecom is worth 156 million shekels. Discount, which is controlled by Argentinian businessman Eduardo Elsztain, had sought to acquire the indebted Eurocom group from businessman Shaul Elovitch but had to withdraw its offer due to difficulties relating to Eurocom’s holding in Bezeq Israel Telecom. Discount would have had to sell its controlling stake in Cellcom, the country’s largest mobile phone operator, which competes with Bezeq, to win regulatory approval to buy Eurocom. Discount Investment shares closed up 1.65% on the Tel Aviv exchange at 11.08 shekels. (Reuters and TheMarker)

Farmers get in on cannabis firms’ share rally

Shares of two cannabis-related firms, Medivie Therapeutic and Together Startup Network, have continued to soar on the Tel Aviv Stock Exchange and cannabis farmers want to get in on the action. Medivie and Together Startup Networks, which merged with Globus Pharma, have plans to grow medical marijuana and sell it abroad.  Their shares closed up in Tel Aviv on Tuesday by 26.13% and 35.2% respectively at 103.40 shekels ($29.63) and 11.60 shekels, although neither has planted its firm marijuana seeds.

The share prices of the two companies have each jumped by about 400% since the beginning of the month.  On Tuesday morning, apparently in the belief that the field had proven itself, at least on the capital market, Amir Marketing and Investments, a supplier to the agricultural sector and a subsidiary of Amir Supply, which is owned by the Farmers Federation of Israel, announced that it had decided to invest $27 million in an Israeli cannabis firm. It did not say which one. On that news, its shares closed up 28.13% at 32.20 shekels in Tel Aviv on trading volume of 17 million shekels. (Guy Erez)

Rami Levy expected to exercise option to buy control of Cofix 

Rami Levy Chain Stores is expected to exercise its option to increase its stake in the Cofix Group, the operator of the chain of discount cafes and groceries, giving Rami Levy a controlling stake of 50.01% in Cofix. Rami Levy, which operates its own chain of discount supermarkets, is expected to close on a prior agreement on April 1 through which Rami Levy bought 20% of Cofix. The deal includes the option to acquire a majority stake in Cofix at a 15% discount on its average share price in the 30 days preceding the exercise of the option. Rami Levy is expected to exercise the option within the next several weeks, which will give it the authority to make the changes that it seeks to Super Cofix, a Cofix subsidiary owned in equal shares by the Cofix Group and the Green Lantern fund. Rami Levy also has an option to buy Green Lantern’s stake and its thought likely that the stores will be converted to a Rami Levy brand. Rami Levy refused to comment for this story. (Yoram Gabison) 

Earnings improvement at Israel Aerospace 

Government-owned Israel Aerospace Industries released its financial results for 2017 on Tuesday, which showed a substantial improvement in its operations, with an operating profit of $121 million after a $105 million loss the year before.  A major factor in the improved financial results was the slashing of salary expenses by about 200 million shekels ($57 million).

IAI chairman Harel Locker has been heard recently expressing the view that the company, which in engaged in part in the development of commercial and military aerospace technology, needs an injection of capital if it is to grow. The workers’ committee has been very involved in plans for the IPO and it is though likely that plans for it would await elections to the committee leadership in the coming months. (Hagai Amit)

Gains on the TASE led in part by insurance stocks

Shares on the Tel Aviv Stock Exchange showed relatively strong gains in Tuesday’s trading. The benchmark Tel Aviv 35 index rose 0.7% to 1,448.50 points while the Tel Aviv 125 index was up 0.91% on the day, closing at 1,322.07. The Tel Aviv 90 index put in an even stronger performance, rising 1.6% to 1,079.04. Trading volume was 1.3 billion shekels ($372 million). The Insurance Plus index jumped 2.4% to 1,773.47 after gaining 1.1% Monday on insurance company earnings reports.

Menora Mivtachim Holdings reported a 2017 profit on Monday of 339 million shekels, up 72% over 2016. The Banks 5 index climbed 1.21% to 1,941.89 on Tuesday and Bank Leumi and Hapoalim were the most heavily traded stocks of the day. Ormat Technologies announced the closing of $100 million in debt financing from affiliates of the Migdal Group. (Guy Erez)