Business in Brief: Institutions to Help Fund Energean Gas Field

Starboard ups ante in Mellanox fight; Yahak bids for Equital shares; stocks stung by Teva

Tamar natural gas production rig in 2016.
Tomer Appelbaum

Israeli institutional investors are expected to finance a large part of the Greek company Energean’s $1.5 billion in costs for developing the Tanin and Karish gas fields off Israel. The loan consortium being organized by Bank Hapoalim is expected to include insurance companies Migdal, Harel, Clal, Phoenix and Menora Mivtachim, as well as the Psagot investment house and medium-sized banks like Israel Discount. Each of them will contribute about $100 million to the loan package. Energean and its 50-50 partner in the fields, Kerogen Capital, are also seeking equity finance via an initial public offering in London and will add about $450 million of their own capital to complete the financing. It’s unusual for institutions to lend money for an energy project, but Energean has lined up anchor customers for its gas, so the risk is relatively low. (Michael Rochvarger)

Starboard raises stakes in Mellanox fight
Starboard Value, the activist U.S. investment fund, raised the stakes Wednesday in its battle with Mellanox Technologies’ management over the company’s financial performance, asking shareholders to vote in an alternative slate of candidates for the Mellanox board. “Our interests are directly aligned with yours, and after years of substantial underperformance, our goal is to help drive significant value creation for the benefit of all shareholders,” Starboard said in a letter to shareholders. Since it accumulated a 10.7% stake in Mellanox, Starboard has been pushing CEO Eyal Waldman to improve the company’s financial and share price performance and took the company to task for rejecting a potential merger with rival Marvell Technology. The nominations include Starboard head Jeffrey Smith, who has become the face and name behind the fund’s multiple proxy contests. Shares of Mellanox, which makes computer networking products using InfiniBand and Ethernet technology, were up 0.4% at $64.55 at late morning local time in New York. (Assa Sasson)

Yahak makes offer for Equital shares
Yahak, the closely held company that controls Isramco and Airport City, is making a 400 million shekel ($117 million) offer for up to 25% of the public’s shares in holding company Equital. The offer, announced Wednesday night, is for 97.70 shekels a share, a 13% premium on Equital’s average share price on the Tel Aviv Stock Exchange over the last six months. The offer marks the first step toward consolidating the Equital group’s pyramid structure. If shareholders respond positively, the tender will increase Yahak’s stake in Equital to 70% ahead of a merger between Equital and its JOEL oil exploration subsidiary, letting Yahak retain a 44.5% stake in the merged company. Like other pyramid-structured groups, the Equital group faces a December 2019 deadline under the Business Concentration Law to reduce the number of its tiers to no more than two publicly traded companies. Equital shares closed 0.5% lower at 96.37 shekels. (Eran Azran)

Tel Aviv shares drift lower as Teva tumbles
Tel Aviv stocks fell Thursday as a sharp decline by Teva swallowed up gains by Bezeq group stocks and banks. The benchmark TA-35 index finished down 0.1% at 1,533.58 points, while the TA-125 lost nearly 0.2% to 1,390.61, on turnover of 1.55 billion shekels ($450 million). Teva dropped 3.6% to 70 shekels in its second day of sharp declines. Bezeq gained 3.45% to 5.74 on the back on a takeover battle that emerged this week. Parent companies B Communications and Internet Gold rose 3.6% to 67.22 and 3.8% to 35.47, respectively. Bank shares advanced for a second day, led by a rise of 1.2% by Leumi to 21.57. Also, El Al Airlines closed 3% higher at 1.39 after it said it had agreed to lease another Boeing Dreamliner. Elbit Systems gained 0.2% to 481 after the company was awarded an $85 million contract from an unnamed European country for electronic warfare and signal intelligence systems. (Guy Erez)