Business in Brief: Drone Maker Aeronautics Signs Deal to Be Sold to Rafael, Avihai Stolero

Housing & Construction reaches agreement to buy American builder ■ Teva reaches settlement with U.S. on ‘pay-for-delay’ drug deals ■ Delek in advanced talks to sell Phoenix to U.S. fund Centerbridge ■ Bezeq and B Comm pace gains for Tel Aviv shares

FILE PHOTO: A drone model is seen on display at the booth of drone maker Israel Aerospace Industries at the Singapore Airshow, February 8, 2018.
Brenda Goh/Reuters

Drone maker Aeronautics signs deal to be sold to Rafael, Avihai Stolero

Aeronautics, the troubled maker of military drones, is being sold to the state-owned arms maker Rafael Advanced Defense Systems and businessman Avihai Stolero for 850 million shekels ($235 million), Aeronautics said on Wednesday. The parties signed terms for the all-cash deal Wednesday morning but still face opposition from Aharon Frenkel. While Frenkel has amassed a 30% stake in Aeronautics, sources said shareholders were expected to approve the deal. The 15.36 shekels a share purchase price is double that of Aeronautics’ average price in the 30 days prior to Rafael’s offer on January 13, but since then, the price has soared, closing on Wednesday at 14.88 shekels, up 3% for the day. Rafael and Stolero will each kick in half the purchase price and share control of Aeronautics equally. Two weeks ago, Israel’s Defense Ministry ended its suspension of Aeronautics’ marketing and export license to an unnamed overseas customer but a ban still applies to two company executives. (Guy Erez)

Housing & Construction reaches agreement to buy American builder

Under its new Israeli-American controlling shareholder, Naty Saidoff, Housing & Construction Limited has finally gotten a major foothold in the U.S. market. The company said on Wednesday that it had reached a deal to buy Infrastructure & Industrial Construction USA (I+icon) from a group led by private equity fund FdG Capital Partners for what market sources estimated was between $30 million and $40 million. Saidoff sees H&C’s future growth engine in the United States, a market he knows well from his years as a Los Angeles-based developer. “The owners of H&C have successfully operated for more than 40 years in the U.S. market, so we are confident that the acquisition will be successfully integrated into the company’s existing operations in America,” said Chairman Tamir Chen. I+icon USA has turnover of about $225 million annually and is focused on the East Coast states of Pennsylvania, Maryland, Virginia and Florida. H&C shares closed up 4.45% at 6.60 shekels ($1.83) on Wednesday. (Shelly Appelberg)

Teva reaches settlement with U.S. on ‘pay-for-delay’ drug deals

The United States government has reached a settlement with Teva Pharmaceuticals over charges that its agreements with rivals impeded consumer access to lower-priced generic drugs. The Federal Trade Commission on Tuesday said it had settled three reverse payment fights with units of Teva, which will be barred from making similar agreements in the future. “This broad settlement prevents the world’s largest manufacturer of generic drugs from entering into collusive agreements that prevent price competition by keeping generic drugs off the market,” FTC Chairman Joe Simons said. The FTC has opposes so-called “pay for delay” settlements, in which a brand-name drug maker pays or otherwise compensates a generic rival to delay releasing a cheaper version of its product. The FTC believes the practice is a violation of antitrust law and fought one case to the Supreme Court. Teva shares closed down 2.2% Wednesday at 63.63 shekels ($17.60). (Reuters)

Delek in advanced talks to sell Phoenix to U.S. fund Centerbridge

Israel’s Delek Group said on Tuesday that it was in advanced talks to sell its remaining 30% stake in insurer Phoenix Holdings for 1.6 billion shekels ($442 million). Yitzhak Tshuva’s holding company didn’t identify the potential buyer, but it is reportedly the U.S. private equity fund Centerbridge Partners. Centerbridge executives are expected to arrive in Israel next week to sign an agreement and meet with regulators. Delek faces an end-the-year deadline under the Business Concentration Law to divest its Phoenix stake, but earlier efforts to sell the insurer to American and Chinese buyers fell through in the face of regulatory opposition. In recent months, Delek has been divesting small stakes in Phoenix, one of Israel’s largest insurance companies, reducing its holding by 20 percentage points. Shares of Phoenix, whose market cap is about the same as the Centerbridge deal values the company, ended up 3.4% at 21.16 shekels Wednesday. (Assa Sasson and Michael Rochvarger) 

Bezeq and B Comm pace gains for Tel Aviv shares

Tel Aviv shares rose on Wednesday as Bezeq and its B Communications parent company rallied. The benchmark TA-35 index finished the day up 0.6% at 1,578.36 points, while the TA-125 added nearly 0.7% to 1,436.34, on turnover of 1.2 billion shekels ($330 million). Bezeq was the volume leader and rose 5% to 3.30 shekels while B Com led gains for TA-125 companies with a 7.25% rise to 17.15. Melisron rose 1.1% to 1.78, even though the mall owner and developer reported a 25% drop in 2018 profit to 631 million shekels. ILDC rose 1.8% to 28.57 after it agreed to sell its Rimon hotel chain to Dan Hotels for 225 million shekels. Electreon, whose rally yielded a market cap of as much as 800 million shekels, tumbled 9.7% to close a Wednesday close of 64.57. Hadera Paper dropped 5.6% to 286.40. (Assa Sasson)