The Ticker

Elco Wins Bidding for Bankrupt Globus Max Cinema Chain

Court clears Tel Aviv Stock Exchange demutualization plan; FDA warning for Teva’s biosimilars partner; Tel Aviv shares wilt in heavy trading

A Globus Max theater in Carmiel, Israel, in 2014.
Raphael Delouya

Elco won bidding on Thursday to buy the bankrupt cinema chain Globus Max for 144 million shekels ($40.9 million). It beat out five other rivals, including private equity fund Apax Israel, which competed with it in the second stage of the bidding process. Globus Max filed for protection from creditors two-and-a-half months ago amid overspending on new cinema and accusations from the trustee who took over the chain of improper management practices that left it with 330 million shekels of debt. The chain was founded by Yoram Globus, a leading film producer in Israel and the U.S. in his heyday. However, it ran into financial difficulties and its assets were sold in 2014 to a U.S. group led by Bennett Kaplan. The acquisition is outside Elco’s core business of manufacturing and marketing air conditioners and electronics, but comes on the heels of its acquiring Golan Telecom, another unrelated business, last April. Shares of Elco finished down 3.7% y at 66.72 shekels. (Adi Dovrat-Meseritz)

Court clears TASE demutualization plan

The Tel Aviv Stock Exchange on Thursday won approval from the Tel Aviv District Court to become a for-profit bourse, culminating a three-year push to alter its structure to make it more competitive, cheaper and more efficient. “Today the TASE embarks on a new era, joining the world’s leading exchanges,” said chairman Amnon Neubach. “The demutualization facilitates the entry of new TASE players and will contribute to the establishment of partnerships, which will lead in turn to increasing competition, and will strengthen TASEs position in the Israeli capital market.” The demutualization plan aims to end the banks’ control and boost listings and trading volumes. The TASE, which will now be entitled to distribute its earnings and even issue shares in public offerings, has struggled for years to revive flagging listings and volumes, despite attempts to reform. Under the new structure, member brokerages and Israeli and foreign banks will become shareholders. (Reuters)

FDA warning for Teva’s biosimilars partner

Teva Pharmaceuticals’ plans to enter the fast-growing biosimilars market suffered a setback on Wednesday after the U.S. Food and Drug Administration issued a warning about manufacturing conditions at Teva’s South Korean partner. Teva and Korea-based Celltrion signed an agreement nearly a year ago, giving the Israeli company rights in the United States and Canada to two Celltrion-manufactured biosimilars – Rituxan for treating non-Hodgkin Lymphoma, and Herceptin, for breast cancer. In their proprietary form the two drugs have sales of $6.5 billion in the United States. However, the FDA said in a Form 483 warning that Celltrion failed at its Inchon plant “to demonstrate that your manufacturing process can reproducibly manufacture drug substance meeting its predetermined quality attributes.” Shares of Teva, which applied for the FDA approval of the drugs this summer, ended 1.1% up at 55.60 shekels ($15.78). (Yoram Gabison)

Tel Aviv shares wilt in heavy trading

Tel Aviv shares ended lower on Thursday in unusually heavy trading, weighed down by losses for biomed and insurance stocks. The TA-35 and TA-125 indices both lost about 0.4% top finish at 1,388.09 and 1,260.41 points, respectively, as 2.53 billion shekels ($720 million) in shares changed hands. Mazor Robotics led biomed shares lower, falling 3.9% to 80 shekels while Opko health lost 2.8% to 21.79. The declines for insurers was paced by a 2.3% drop for Menorah to 42.30. ADO, the property company at the center of a struggle for control, ended down 6.4% at 63 amid signs that the two sides were seeking to reach an agreement over joint control. Israel Petrochemicals raised 290 million shekels at 6.6% in the institutional tranche of a bond sale. In foreign currency trading, the dollar sank more than 0.9% to a Bank of Israel rate of 3.5280 shekels. (Uri Tomer)