Business in Brief: Tel Aviv Shares Mixed in Quiet Trading Day

Latest Africa Israel bailout proposal fails ■ Internet Gold edges to liquidation after failing to get improved offer for B Com

Tel Aviv Stock Exchange, August 4, 2016.
Rina Castelnuovo/Bloomberg

Internet Gold edges to liquidation after failing to get improved offer for B Com

Internet Gold edged closer to liquidation after it failed to get a significantly better offer from the U.S. investment fund Searchlight Capital Partners for its stake in B Communications. Internet Gold executives were in New York last week to coax Searchlight into improving on its January offer for the 52% stake in B Com, which in turn has a controlling 26% of Bezeq. Searchlight, however, came back with two alternative offers that would both leave Internet Gold’s creditor-shareholders with a considerable haircut. The first is for 17.50 shekels ($4.80) a share, slightly overt B Com’s closing price on Sunday and would leave bondholders with a 240 million shekel haircut. The second is for 17 shekels a share now with the prospect of getting another 8 later if B Com shares rise to a range of 47.25 to 69.50 a share. That would leave bondholders with a 100 million haircut. Internet Gold shares plunged 15.3% to 2.61 shekels. (Shelly Appelberg)

Latest Africa Israel bailout proposal fails

The latest effort to reach a debt bailout for Africa Israel Investments failed on Thursday when bondholders rejected a new offer from Moti Ben-Moshe to replace his 1.29 billion shekel ($350 million) cash offer with a mostly debt-financed one. Ben-Moshe said he would put up 390 million shekels in cash and finance the rest of the acquisition with 900 million shekels of new bonds by his Blue Square holding company issued to Africa Israel bondholders. The five-year bonds would pay 4%, effectively reducing the price he pays for Africa Israel by 150 million. In defending the offer, Ben-Moshe said he was unable to get a bank loan to finance the bailout because bondholders and others had deterred potential lenders by accusing him of being a fraud and liar. Thus bondholders should be morally obligated to provide the financing, Ben-Moshe said. In response, bondholders said Blue Square bonds was not in a financial position to take on more debt. (Shelly Appelberg)

Tel Aviv shares mixed in quiet trading day

Tel Aviv shares ended mixed in dull trading on Sunday. The benchmark TA-35 index edged 0.06% higher to 1,539.36 points, while the TA-125 fell 0.02% to 1,401.13, on thin turnover of just 486 million shekels ($133 million). LivePerson led gainers on the TA-125 with a 4.7% rise to 90.01. Teva Pharmaceuticals dropped 1.5% to 66.34 shekels. The drug maker said it completed the sale of its Tevadaptor unit in Kiryat Shemona for $47.5 million. Partner Communications dropped 0.9% to 17.87 after saying it planned to enter the credit card business. Cannabis shares rallied – InterCure rose 7.6% to 14.20, Herodium 25.7% to 11.20 and Dunivo gained 20.8% to 5.80. Energix led TA-125 losers, falling 2.4% to 4.87. Brack Capital advanced 2.3% to end at 365.10, but most property stocks were lower. Waterstone bonds plummeted 10% to a 20% yield after the U.S. property developer said the $104 million sale of its San Bernardino property announced last month had been cancelled. (Michael Rochvarger)