Business in Brief: Israel’s Together to Buy Control of German Cannabis Customer

Executives of Israeli drone maker face charges for violating defense export law ■ New sexual harassment allegations send Fox shares plummeting ■ Tel Aviv markets move moderately up

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A stock market ticker displays financial information and world time zones in the lobby of the Tel Aviv Stock Exchange in Tel Aviv, Israel, on Thursday, Aug. 4, 2016
A stock market ticker displays financial information and world time zones in the lobby of the Tel Aviv Stock Exchange in Tel Aviv, Israel, on Thursday, Aug. 4, 2016Credit: Bloomberg

Executives of Israeli drone maker face charges for violating defense export law

Prosecutors will indict 10 employees of the Israeli drone manufacturer Aeronautics, the Justice Ministry said Wednesday. Company officials and executives are suspected of fraud and violating Israeli defense export law. The ministry said the State Prosecutor’s Office has summoned to a preindictment hearing CEO Amos Matan, Deputy CEO Meir Rizmovitch, development director Haim Hivzshar, marketing director David Goldin and others. In August 2017, the Defense Ministry made the unusual announcement that it was suspending the company’s permission to sell and export drone technology to a certain client. Following the announcement, the police opened an investigation, and a gag order was issued concerning details of this probe. The branch supervising defense export allowed Aeronautics to continue to sell its products to other countries, but after the suspension of the company’s license, its share price plummeted by 17%. (TheMarker)

New sexual harassment allegations send Fox shares plummeting

Shares of fashion group Fox plunged 8.6% Wednesday following yet another allegation of sexual harassment against its CEO. The stock is now down 15% in 10 days since the scandal first emerged, wiping out 150 million shekels ($41.2 million) from Fox’s market cap. The drop indicates that investors do not believe the embattled CEO and controlling shareholder, Harel Wizel, can remain in the job. The drop Monday came in the wake of a follow-up report by the investigative television program “Hamakor” that aired Tuesday. A former employee who was not identified said that on one occasion Wizel forcibly kissed her. “I left the bathroom and he suddenly appeared and pushed me back into the bathroom. I was in shock. My entire body was shaking. I completely froze,” she said, adding that the incident was a “major trauma” for her. In a response, Wizel said the alleged incidents “are fundamentally untrue.” (Eran Azran)

Israel’s Together to buy control of German cannabis customer

Together Pharma, which produces medical cannabis, said Wednesday it had signed a deal to buy a controlling 50.01 percent stake in an unnamed German company, which is one of its customers, for 2 million euros. Together said it had already signed an agreement to supply about 12.5 tons of medical cannabis worth up to 50 million euros to the German company, which also holds a research and development license for medical marijuana in Germany. Together said it would finance the deal from cash and assets, which will be recorded as an owner’s loan. It said the parties will work towards signing a final deal within 90 days. It estimated that once the deal is final, it will be able to sell its produce at a price that is currently about 10 to 12 euros per gram of medical cannabis in Germany through direct sales, since the German company has a distribution agreement with 100 pharmacies. (Reuters)

Property firm Summit sees surging profit as its stock rises further

Summit Real Estate Holding reported that its second-quarter revenue had surged 38.2% to around 94 million shekels ($25.8 million), from 68 million shekels for the parallel period in 2017. The company attributed the rise mainly to property acquisitions, the betterment of properties and a gain in the euro against the shekel. Summit, whose controlling shareholder is Zohar Levy with a 46% stake, invests in income-producing real estate with 106 properties for rent covering about a million square meters. Summit shares have recently shot up 40%, bringing its market cap to 2.2 billion shekels. Shares rose another 5% after the quarterly report. Summit’s net operating income for the quarter grew around 30% to 82 million shekels, compared to 63 million shekels for the parallel 2017 quarter. Summit’s properties in Germany also contributed significantly to the company’s financial success. “We are witnessing a sharp rise in rental prices in Germany,” said Summit CEO Amir Sagy. (Eran Azran)

Tel Aviv markets move moderately up

The Tel Aviv Stock Exchange closed moderately up Wednesday, with share prices gaining up to 0.5% on average. The benchmark TA-35 index finished the day up 0.5% at 1658.65 points, while the broader TA-125 gained 0.41% to 1489.24. Trade was stable but the gains intensified later in the day. Even the Banks-5 index, which had softened in recent days, ended up 0.2%, despite declines in shares of Bank Hapoalim and Bank Hamizrahi-Hapoalim of 0.3% and 1.6%, respectively. Mizrahi is down 13% since tangling with U.S. authorities over the size of a fine. Retailer Fox drew most attention, plunging 8.6% amid new sexual harassment allegations against CEO Harel Wiesel. Shares of Holmes Place shot up 9.8% to 3.83 after the fitness chain announced record net profits of 9 million shekels ($2.5 million) for the first half of 2018. In foreign exchange markets, the dollar and euro both gained ground against the shekel, although the dollar sank after the Bank of Israel announced it was holding interest rates steady (see story this page). (TheMarker)

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