Business in Brief: Collapse of Teva Shares Has Limited Impact on Investors

Intel extends offer to Mobileye shareholders till August 21 ■ Gilat makes further progress toward restoring profitability ■ Teva continues to pressure Tel Aviv shares lower

Collapse of Teva shares has limited impact on investors

The collapse of Teva Pharmaceuticals’ share price since on Thursday created a panic on Israeli financial markets, but the response was overwrought. Even after a 40% drop in its share price, Teva’s 67.5 billion-shekel ($18.7 billion) market cap remains by far the biggest on the Tel Aviv Stock Exchange. Its decline hurt not only Teva investors but those invested in the TA-35 index, which has fallen 3.3% since Thursday. However, long-term savings plans, like pension funds, held only about 4.3% of Teva and that was worth 5.1 billion shekels at the end of March. Before the latest bad news (and assuming there was no net change in the funds’ position), the holdings’ value had shrunk to 4.8 billion shekels. Since then, they have lost another approximately 1.8 billion, but Israeli long-term savings add up to 1.2 trillion shekels, so that the loss from Teva amounts to just 0.1-0.2% of their assets. (Guy Erez)

Intel extends offer to Mobileye shareholders till August 21

Intel has further extended its offer to buy out remaining shareholders of Israel’s Mobileye after securing 84% of the acquisition target’s shares, the two companies said on Tuesday. Intel and Mobileye said they had begun a follow-up offering period which is scheduled to expire just before midnight New York time August 21. This could be extended by five business days or more to maximize the number of minority shareholders who accept the offer. In an effort to persuade any investor holdouts to tender their remaining shares, Mobileye said it had submitted notice to the New York Stock Exchange of plans to delist its shares as early as the end of the month. Mobileye is the world’s largest maker of systems used in automotive collision detection systems and is working with Intel, car companies and auto parts suppliers to develop autonomous driving systems. The $15.3 billion acquisition aims to propel Intel into the top ranks of automotive suppliers. (Reuters)

Gilat makes further progress toward restoring profitability

Gilat Satellite made further progress in the second quarter to restoring profitability as sales rose for equipment it makes that provides internet connectivity for commercial airplanes. Adjusted earnings reached $4.6 million, or 8 cents per diluted share, turning around from a loss of $600,000, or 1 cent per diluted share, a year earlier. Overall revenues fell to $66.2 million from $67.9 million in Q2 2016, but sales of Gilat’s in-flight connectivity gear through Gogo, a provider of broadband Internet service for commercial and business aircraft, rose sharply. “Gogo is now installing our modems in an accelerated fashion on commercial flights with a plan to reach over 1,800 aircrafts across more than 13 airlines,” said Gilat CEO Yona Ovadia. Gilat raised its revenue forecast for 2017 to between $280 million to $290 million and its adjusted EBITDA to between $22 million and $26 million. Gilat shares ended up 3.2% at 20.03 shekels ($5.55). (Yoram Gabison)

Teva continues to pressure Tel Aviv shares lower

Teva Pharmaceuticals continued to wreak havoc on the Tel Aviv Stock Exchange on Tuesday, but the decline extended across all sectors except for real estate. The TA-35 index, which has fallen 4.3% since July 25, lost another 0.4% to end at 1,392.75 points as 1.66 billion shekels ($460 million) in shares changed hands. The TA-125 also dropped close to 0.4% to 1,260.99. Teva dropped 6.5% to 66.48 shekels as it reeled from a giant second-quarter loss. Vered Yitzhaki of Protective Financial Consulting said the drug maker’s woes also weakened the shekel as the Israeli currency lost 0.44% against the dollar to a Bank of Israel rate of 3.6050. Other big losers were Cerragon, which tumbled 9.4% to 7.70, erasing its rally from the day before, while El Al dropped 6.7% to 3.07. Menorah bought a 3% stake in Tamar Petroleum at 22.82 shekels a share, but Tamar ended down 0.5% at 22.58. (Guy Erez and Shelly Appelberg)