Business in Brief: Israeli Cafe Chain Cofix Cites Terror for Slumped Earnings in 2015's Fourth Quarter

Bank Hapoalim to raise more than $640 million in bond offering to institutions; Entropy advises rejection of Nestle’s buyout of Osem, saying price is inadequate; Tel Aviv shares end higher led in part by surge in biotechnology shares.

A branch of the Cofix coffee chain, south Tel Aviv, January 2015. Less profit per sale, but more sales.
Ofer Vaknin

Cofix reports earnings slump in 4th quarter 2015, and cites terrorism wave as a factor

Cofix Group, which operates the cut-rate cafes and supermarkets that bear its name, reported fourth-quarter 2015 profits of 1.2 million shekels ($256,000) on Tuesday, a decline from the 1.2 million shekels the company earned in the third quarter of the year, but a major improvement over its Q4 2014 loss of 2 million shekels. The company’s revenues surged by 21% in Q4 compared to Q3 and, at 42 million shekels, were 147% higher in Q4 compared with Q4 2014. Between Q3 and Q4, sales from its Cofix cafes grew by a tepid 5.3% compared to Q3, but were 133% higher than Q4 2014. At the end of 2015, Cofix had 112 coffee house outlets compared to 91 at the end of September. The company said the wave of Palestinian violence that erupted last fall depressed business in Q4 but the decline was reversed in mid-February. Cofix shares closed Tuesday at 13.54 shekels, up 2%. (Yoram Gabison)  

Bank Hapoalim to raise more than $640 million in bond offering to institutions 

Bank Haopalim, the country’s largest lender, said Tuesday that it plans to raise 2.5 billion shekels ($640 million) in a bond offering to institutional investors. The bank initially planned to sell 2 billion shekels of bonds, but said it has received strong demand from institutions in the tender. Standard & Poor’s Maalot rated the bonds “AAA” while Midroog, the Israeli affiliate of Moody’s Investors Service, rated them “Aaa,” but the ratings are only for an amount up until 2 billion shekels. Haopalim said it had requested the agencies for ratings up to 3 billion shekels. Later this week, Hapoalim plans to sell the bonds to the public that are inflation-linked and will pay annual interest of 5%. The principal will be paid between 2021 and 2023. (Reuters)

Entropy advises rejection of Nestle’s buyout of Osem, saying price is inadequate

The Entropy consultant firm has advised institutional investors to oppose Swiss food giant Nestle’s bid to buy out minority shareholders of the country’s third-largest foodmaker, Osem. Last month, Nestle offered 3.3 billion shekels ($845 million), or 82.5 shekels per share, for the Osem shares it does not own, in a deal that would value the company at 9.13 billion shekels. In a report prepared ahead of a shareholders’ vote on March 17, Entropy, whose clients are institutional investors, said the valuation Nestle has offered is too low and less than other purchases by Nestle in recent years. Osem rejected Entropy’s argument and said that the terms of the deal the company negotiated are fair. When Nestle made its initial buyout proposal last November, the shares stood at 76.7 shekels against a Nestle offer of 80 shekels, representing a 4.2% premium, it noted. Nestle already owns 63.7% of the company while institutions hold 7%. (Reuters)

Tel Aviv shares end higher led in part by surge in biotechnology shares 

The benchmark Tel Aviv-25 index rose 0.21% in trading Tuesday, closing at 1,460.48 points and the broader Tel Aviv-100 index rose by 0.13% to 1,255.80 points. Trading volume on the day was 1.27 billion shekels ($325 million). The Biomed index continued its recent climb, rising another 1.1% Tuesday to 453.05 points while the Communications index also rose by 1.1%, to 1,062.38 points. Bucking the trend were the Banks-5 index, which declined by 0.4% to 1,276.39, and the Real Estate-15 index, which was off 0.5% to 384.06 points. The biomed index was boosted in part by a 7.2% jump in the value of Pluristem shares to 5.98 shekels and an 8.7% rise in Redhill Biopharma’s stock, which closed at 4.80 shekels. In the case of Redhill, the share increase followed the company’s report regarding positive results on a Stage 3 clinical trial. The Tel Bond 20, 40 and 60 indexes were up by 0.1% in Tuesday's trading. (Uri Tomer)