New Teva CEO Kare Schultz Will Reportedly Start by End of Month

Business in Brief | Official says activist institutional investors are hurting the stock market ■ IAI forms drone joint venture in Korea ■ Tel Aviv shares drift sideways

File photo: A Super Heron HF drone, manufactured by Israel Aerospace Industries Ltd. (IAI), stands on display in Paris, France, June 15, 2015
Jasper Juinen/Bloomberg

New Teva CEO Kare Schultz will reportedly start by end of month

Kare Schultz will take up his new job as CEO of Teva Pharmaceuticals by the end of the month, the Calcalist financial newspaper reported on Tuesday. Teva hired Schultz from Denmark’s H Lundbeck in September and said Schultz would join and relocate to Israel as soon as possible, but never announced an official start date. The Israeli company is beset by multiple problems, including $35 billion in debt and declining prices for generic drugs in the United States. Since Schultz signed on, Teva has suffered another big blow, with U.S. and European regulators approving generic versions of its bestselling proprietary multiple sclerosis treatment Copaxone. That has added urgency to the need for new leadership after Erez Vigodman stepped down in February. Asked about the report, a Teva spokesman told Reuters that the company does not comment on market rumors. Shares of Teva ended down 1.1% at 51.84 shekels ($14.75). (TheMarker Staff)

Official says activist institutional investors are hurting the stock market

Institutional investors are causing companies to delist from the Tel Aviv Stock Exchange by trying to impress their clients by taking an activist stance toward their portfolio companies, Ilan Flato, the CEO of the Israel Association of Publicly Trader Companies, told a conference on Tuesday. "Many institutions have turned the obligation to vote [at shareholders’ meetings] into a marketing tool whose aim is to show investors that ‘we’re protecting the public,’” Flato said. “It’s become so absurd that investment committees are discussing the pay of vice presidents or of one director or another – issues that aren’t critical.” The phenomenon has led to declining trading volumes and market capitalizations on the TASE, deterring companies from going public, he said. “The thing that deters companies from remaining public or becoming public is the issue of controlling versus minority [shareholders] and the interference of outside groups on issues of internal management." (Uri Tomer)


IAI forms drone joint venture in Korea

State-owned Israel Aerospace Industries said on Tuesday it was partnering with Hankuk Carbon, a South Korean company specializing in composite materials, to develop a new generation of drones for military and civilian use. The two companies signed a joint venture agreement at the International Aerospace and Defense Exhibition in Seoul. Each will hold a 50% stake in the venture, which will be called Korea Aviation Technologies. It is first planning to manufacture a vertical takeoff and landing drone with a maximum takeoff weight of 300 to 450 kilograms, but it may branch out into other models as well, IAI said. Tensions on the Korean Peninsula have risen in recent weeks as North Korean leader Kim Jong Un and U.S. President Donald Trump exchanged threats and insults over the North’s development of missiles and nuclear weapons. IAI is Israel’s top-selling defense group, and its satellite, weapons and drones systems are used in many countries around the world. (Reuters and AP)

Tel Aviv shares drift sideways 

Tel Aviv shares drifted sideways on Tuesday, with financial services stocks showing losses. The blue chip TA-35 index finished almost unchanged at 1,443.68 points, while the TA-125 added 0.2% to end at 1,316.31, as 1.1 billion shekels ($310 million) in shares changed hands. AudioCodes led gainers on the TA-125, rising 9.2% to 28.01 shekels after it reported winning a contract from BT. ADO rose 4% to 72.80 after Lapidoth Capital bought 150,000 shares at 70 shekels each. Strauss Group extended Monday’s gain following a positive Citigroup report, rising 3.2% to finish at 13.62. Ham-Let climbed 2.5% to 64.50 after Leader Capital Markets started coverage of the stock with a "market outperform" rating and a 74 shekel price target. Bank Hapoalim led financial service stocks down, falling 1.5% to 25.61. El Al Airlines extended its recent losses to shed 4.2% to 1.99 shekels. Isramco advanced 2.1% to 48 agorot in heavy trading. (Omri Zerachovitz)