Business in Brief: Wall Street Undercuts Tel Aviv Shares Again

Idan Ofer agrees to sell TV stake; Israeli bondholders get control of Brookland; Baran shares soar on news that foreign buyer seeks control

FILE PHOTO: The Tel Aviv Stock Exchange, August, 4, 2016.
Bloomberg

Baran shares soar on news that foreign buyer seeks control

Shares of Baran soared Thursday after the engineering company reported that its controlling shareholders received an offer from an unidentified foreign firm to buy their controlling stake. Alexander Nesis and Meir Dor said talks were due to begin this month on the possible sale of a 50.01% stake in a deal that would value the whole company at 256 million shekels ($68.7 million). That works out to triple Baran’s shareholders’ equity and at 25.37 shekels a share 328% of Baran’s opening price in Tel Aviv Stock Exchange trading Thursday, the company said. Nissim and Dor reported the offer to Baran management to avoid any accusations of insider dealing if the company opts to buy back its bonds from investors. Baran shares began climbing sharply late Wednesday, suggesting that the news was leaked. On Thursday they closed up 43.6% at 8.51 shekels. (Yoram Gabison)

Israeli bondholders get control of Brookland

Israeli bondholders effectively took control of the financially troubled New York real estate development firm Brookland Capital late Wednesday. Facing a threat from investors to demand immediate repayment of 150 million shekels ($40.1 million) in bonds traded on the Tel Aviv Stock Exchange, Brookland directors voted to appoint a special administrator to represent their interests. The administrator Ronel Ben-Dov, an Israeli residing in New York, was given joint responsibility with CEO Boaz Gilad for the company’s accounts. Gilad is said to have opposed the move, which effectively deprives him of control over the company, but bondholders expressed concerns over possible conflicts of interest because of the big personal debt he carries. Brookland announced in mid-November that it would be unable to meet payments on the bonds due to delays and increased costs on dozens of company projects in Brooklyn. Brookland Series Aleph bonds rose 0.5%. (Eran Azran)

Idan Ofer agrees to sell TV stake

Idan Ofer has opted to traded his stake in the television broadcaster Reshet for the right to able to bid on energy projects in Israel, the government business concentration committee said Wednesday. Ofer agreed to sell his 26% stake in Reshet ahead of a planned merger with Channel 10 that would leave him as a small minority shareholder in the combined entity and not to re-enter the media industry for the next 25 years. Under the 2014 Business Concentration Law owners of major corporate assets, including major media outlets like Reshet, are barred from bidding on government infrastructure tenders. The divestment will thus enable Ofer’s Tzomet Energy to qualify. Ofer, however, may find it difficult to sell the stake, especially as the ruling bars him from selling it to fellow Reshet shareholder Udi Angel. Ofer declined to comment. (Nati Tucker)

Wall Street undercuts Tel Aviv shares again

The Tel Aviv Stock Exchange was again undercut by Wall Street Thursday as a midday recovery was reversed by  sell-offs in New York. The benchmark TA-35 index ended down 0.85% at 1,451.27 points while the TA-125 lost 1.05% to 1,320.16, in heavy trading of 2.12 billion shekels ($570 million). Nice dropped 3.7% to 389.20 shekels and TowerJazz 4.1% to 52.28. Teva Pharmaceuticals jumped 5.8% to 61.31. Teva said it would pay an undisclosed amount to settle a dispute with Amgen over its generic Cinacalcet HCl product and would stop selling it by 2021earlier. Kitov Pharma surged 70.5% higher to 22 agorot after it signed a pact giving Coeptis distribution rights for Kitov’s Consensi drug for osteoarthritis pain and hypertension. Pluristem rose 8.15% to 3.65 after reporting a “positive meeting” with the U.S. Food and Drug Administration regarding its PLX-R18 for treating Acute Radiation Syndrome. (Michael Rochvarger)