Business in Brief: Tel Aviv Shares End Lower on Very Light Turnover

Canceled event fans speculation that Xilinx is poised to buy Israel’s Mellanox ■ Reality Investment Fund raising NIS 1.1 billion for fourth fund

File Photo: Tel Aviv Stock Exchange, Tel Aviv.
Ofer Vaknin

Canceled event fans speculation that Xilinx is poised to buy Israel’s Mellanox

Speculation that Xilinx is poised to buy Israeli semiconductor company Mellanox rose Tuesday after the U.S. company canceled a scheduled presentation by the investment bank ISI Evercore at a conference. Xilinx attributed the cancellation of the Evercore event and others to a crowded time table, but publicly traded companies often pull out of public presentations out of fear they may inadvertently leak insider information on an important upcoming event, like an acquisition. Xilinx has been rumored since November to be eyeing Mellanox at a $6 billion valuation after CNBC reported the company had retained Barclays as an adviser for a potential bid. In February TheMarker reported that investment bankers representing Xilinx had arrived in Israel to seal a deal but returned home in a dispute with Mellanox CEO Eyal Waldman over the price. Mellanox shares were down 0.2% at $109.73 late morning local time in New York Tuesday. Xilinx was up 0.7% at $123.71. (Yoram Gabison)

Reality Investment Fund raising NIS 1.1 billion for fourth fund

Reality Investment Funds is launching a giant 1 billion shekel ($280 million) fund and has begun meeting with institutional investors. Reality has recruited the insurance company Migdal as the anchor investor in its fourth fund, putting in 400 million shekels. Reality has raised 1.26 billion shekels to date in three funds and has taken on loans that leverage its investing power to 2.2 billion. Its property holdings include the Arena Mall in Herzilya, Beit Sokolov in Tel Aviv and the Jaffa customs house. Its internal rate of return to date has been an attractive 15% to 20% annually, which it ascribes to a policy of buying properties that have strong upgrade potential. “We locate properties in less than optimal condition and involve ourselves in things people don’t like to deal with — like solving problems with the Israel Lands Authority, the municipalities, regional planning and building committees,” Ohad Rozen, one of three founding partners, told TheMarker. (Eran Azran)

Leumi Card, now called Max, to begin selling insurance this year

Leumi Card launched itself Tuesday as a wholly independent company caled Max, saying it would expand out of its core credit card business to begin selling insurance and long-term savings plans and services to small businesses this year. “It’s not every day a new financial body is born in Israel,” CEO Ron Fainaro told a news conference a week after the 2.5 billion shekel ($690 million) purchase of the company by Warburg Pincus was completed. Vardit Givandeter, executive vice president for marketing, said credit card use was growing quickly in Israel, among other reasons because of a new law capping the size of cash purchases and a surge of online shopping. Between 2015 and 2018, the use of credit cards for public transportation increased 534%, she noted. The number of credit card transactions of the travel site jumped 964%, 598% at Ali Express and 186% at Amazon in those years, she said. (Michael Rochvarger and Jenya Volinsky) 

Tel Aviv shares end lower on very light turnover

Tel Aviv shares ended lower in very light trading Tuesday as investors around the world awaited the outcome of U.S.-Chinese trade talks. The TA-35 and TA-125 indexes each finished the session down 0.86% at 1,570.23 and 1,432.15 points, respectively, as just 867 million shekels ($240 million) in shares changed hands. Among blue chips, Teva Pharmaceuticals was the biggest loser (see story on this page). Israel Chemicals fell 1,.4% to 20.09 shekels and Opko Health lost 2.8% to 9.69. Cannabis shares had a stormy day: Herodium plunged 16.2% to 6.50 and Dunivo lost 5.7% to 4.12, but Ophectra Real Estate, which has declared its intention to enter the medical marijuana business, surged 1.56% higher to end at 2.67. Elbit Systems dropped 0.3% to 63.68 despite announcing back-to-back contract wins from the U.S. Army and Greece’s Hellenic Coast Guard. TowerJazz fell 2% to 63.68, despite announcing development of a “breakthrough” chip with Axbio for the medical market.(TheMarker)