Business in Brief: Indian Partner Pulls Out of Tie-up With IBM

FIMI weighs offers for part of its Inrom stake | Analysts see mobile shares rallying after watchdog nixes Golan-Cellcom merger | Tel Aviv shares follow world markets higher

Hagai Frid

Indian partner pulls out of tie-up with IBM, TowerJazz to build chip factory in India

A plan to build a semiconductor plant in India in a joint venture between Israel’s TowerJazz, IBM and India’s JP Associates has been abandoned four years after it got under way. “JP Associates has withdrawn its proposal of semiconductor plant. They have said that it’s not commercially viable to set up this plant at present,” said India’s Secretary of Electronics and Information Technology Aruna Sharma, according to Indian media reports. Industry sources said the real reason was delays in getting approvals and JP Associates’ heavy debts. The $4-billion plant was one of two India had approved for development. Under the joint venture agreement, TowerJazz would have provided professional expertise but no capital in exchange for its stake, which would have made the project very profitable. But in a statement, TowerJazz said the joint venture’s future contribution had not been built into the company’s business plan. Shares of TowerJazz were up 0.8% to 42.70 shekels ($11.30). (Yoram Gabison)

FIMI weighs offers for part of its Inrom stake

FIMI, Israel’s biggest private equity investor, is weighing offers from strategic and financial investors to buy much of its 51.2% stake in the building-material supplier Inrom for about 300 million shekels ($79.4 million). FIMI, which is managed by Ishay Davidi, is still undecided about the offers but is likely to act within the next few months. Since FIMI took Inrom public on the Tel Aviv Stock Exchange two years ago, Inrom’s shares have climbed more than 50%, giving it a market capitalization of 1.07 billion shekels. A sale of shares would represent pure profit for the fund, which already earned back its original investment when it sold 350 million shekels in shares in the company’s initial public offering. In addition, Inrom has been paying dividends that to date have generated 80 million shekels in payouts for FIMI. Shares of Inrom closed down 0.9% at 9.80 shekels yesterday. (Michael Rochvarger)

Analysts see mobile shares rallying after watchdog nixes Golan-Cellcom merger

Shares of Israeli mobile operators recovered quickly from Tuesday’s decision by the Antitrust Authority to oppose the proposed merger between Cellcom Israel and Golan Telecom. Most analysts said they expected the shares to rally in the near term, if not to the peaks of last summer, when Cellcom’s price doubled and Partner Communications enjoyed a 90% rise amid expectations that the long price war was coming to a conclusion. “Investors are slowly learning that the coiled spring has been released,” said Eran Jacoby, head of research and consulting at Rosario Capital. “The shares are worth 20% to 30% more than their current market price. What has prevented them from rising so far are mainly the headlines surrounding Golan,” Jacoby said. Shares of Cellcom, which fell 2.5% on Tuesday, rebounded yesterday by 2.2% to close at 27.70 shekels ($7.33). Partner Communications shares, which dropped 1.7% Tuesday, advanced 4.2% yesterday to finish at 18.22 shekels. (Shelly Appelberg)

Tel Aviv shares follow world markets higher

Tel Aviv shares rose sharply yesterday as global markets moved higher after surprisingly upbeat Chinese trade data offered hope that Asia’s biggest economy is finally stabilizing, boosting risk appetite. The Tel Aviv Stock Exchange’s TA-25 and TA-100 indexes both finished about 0.3% higher at 1,467.11 and 1,268.21 points, respectively. Turnover remained very thin, however, at just 962 million shekels ($254.7 million).  Among blue chips, Israel Chemicals climbed 3.1% to 16.68 shekels, Bezeq 1.8% to 8.42 and Nice Systems 2.5% to 238.50. Pluristem finished 1.6% up at 6.44 after it said Japan had granted it two key patents. The yield of Urbancorp bonds shot up to 8.65% after Midroog lowered its rating on them by another notch to Baa2, the second downgrade in the space of a month. In foreign currency trading, the dollar turned higher after reaching a 10-month low Tuesday and was fixed at a Bank of Israel rate of 3.773 shekels. (Shelly Appelberg)