Business in Brief: Castro Signs Deal to Take Stake in Hoodies Group

Shallanoo plans NIS 100 million Tel Aviv IPO | Acquisitions take toll on supermarkets' Q2 earnings | Tel Aviv shares extend losses into a third day.

Bar Refaeli modeling Hoodies
Eyal Nevo

Castro signs deal to take stake in Hoodies group

Castro said Sunday it had signed an agreement to take a 26.4% stake in the Hoodies group of apparel retailers in a deal valuing the group at 356 million shekels ($94.3 million). Castro will get stakes in Hoodies itself as well as the eyewear chain Carolina Lemke and the fashion accessories chain Top Ten and Accessories.

Among the shareholders is supermodel Bar Refaeli, who has a 5% stake in Carolina Lemke and will get as much as 4 million shekels from the sale. Castro will pay 53 million shekels in cash and 4.99% of its shares for the group and inject 21.25 million in cash into it.

“The deal increases Castro’s strength in malls and shopping centers and has the potential of bringing it into new areas it doesn’t operate in today (eyewear) or where it is a marginal player (accessories),” said Ilanit Scharf, analyst at Psagot Investment House. Castro shares closed up 2.8% to 110.80 shekels. (Eran Azran)

Shallanoo plans NIS 100 million Tel Aviv IPO

Roman Abramovich
Reuters

Technology group Shellanoo said on Sunday it plans to raise at least 100 million shekels ($26.5 million) in an initial public offering on the Tel Aviv Stock Exchange in late September or October.

Founded in 2014 and backed by Russian billionaire Roman Abramovich and popstars will.i.am and Nicki Minaj, among others, Shellanoo focuses on mobile applications, online services and interactive artificial intelligence.

Singer Nicki Minaj.
AP

The company said it has been valued at $177 million by consulting firm BDO. By staying local, Shellanoo is bucking a trend of Israeli technology companies to list on foreign markets. Spokesman David Strauss said Shellanoo hopes its IPO would encourage more technology businesses to stay in Tel Aviv.

Shellanoo’s holdings include two dozen mobile apps and digital platforms, some available and some in development. One of them is the anonymous-messaging app Blindspot, founded by Bar Refaeli's brother, which has come under fire for being used in cyber-bullying. (Reuters)

 Bar Refaeli with brother Dror
Getty Images

Acquisitions take toll on earnings at supermarkets in the second quarter

Acquisitions took a toll on earnings at two of Israel’s supermarket chains in the second quarter reporting over the weekend. At discount retailer Rami Levy, sales jumped 10.1% to 1.1 billion shekels ($290 million) thanks to the opening of seven new stores, but same-store sales dropped 3.9% in part due to its acquisition of You discount supermarkets from Mega, whose sales performance doesn’t match that of other Rami Levy stores.

 Operating margins fell to 3% from 3.2%. Shares dropped 1.3% to end at 148 shekels. Meanwhile, Tiv Taam also saw revenues climb by 21.8% in the quarter to 380 million, thanks to its purchase of the Eden Teva Market chain of organic groceries from Mega. But net profits plunged 95% to 474,000 shekels. Turnover at the Eden Teva Market same-store sales actually rose but were so poor they brought down the average for the entre chain by 16%. Tiv Taam shares fell 4.1% to close at 3.31 shekels. (Yoram Gabison)

Tel Aviv shares extend losses into a third day

Tel Aviv shares traded lower all day Sunday in light trading, marking its third consecutive session of trading lower. The TA-25 and TA-100 both lost about 0.4% to end at 1,447.53 and 1,275.68 points, respectively, on turnover of 334 million shekels ($88 million).

Holding company Kenon dropped 6.8% to 41.66 shekels after it said that a Peruvian hydroelectric plant belonging to its IC Power unit would have to be shut down for six months or more due to technical problems.

Mylan extended losses in the fallout from its EpiPen pricing in the U.S.  another 1.6% to end at 162.40, bringing its decline to 12% over four trading sessions. Spuntech dropped 4% to 14.38 after its CEO, Michel Ben eWaiss, said he was quitting after just six months. In foreign currency trading, the dollar weakened nearly 0.4% to a Bank of Israel rate of 3.740, its lowest since early May, after Federal Reserve Chair Janet Yellen gave no indication a U.S. interest rate rise was imminent. The euro also lost nearly 0.4% to 4.2386 shekels. (Omri Zerachovitz)