Business in Brief / Shares, Shekel Shrug Off Terror and Extend Their Gains

Major EZchip shareholder opposes Mellanox acquisition; Ben-Bassat warns terror may depress investment.

Bloomberg

Shares, shekel shrug off terror and extend their gains

Tel Aviv shares and the shekel both strengthened on Thursday as external factors played into sentiment more than security concerns. Tracking gains in global share markets, the Tel Aviv Stock Exchange’s TA-25 and TA-100 indices both closed 1.1% higher at 1,527.07 and 1,311.37 points, respectively, although turnover remained a relatively low 1.11 billion shekels ($290.5 million). Energy shares rallied on news that the government would ask the Knesset next week to remove Economy Minister Arye Dery’s antitrust authority over the gas industry. Delek Drilling jumped 4.6% to 12.41 shekels, Avner advanced 4.3% to 2.39 and Ratio added 4.1% to 28 agorot. Volume leader Teva Pharmaceuticals jumped 2.6% to 226.30 and Opko healthcare rose 6.1% to finish at 35.66 shekels. In foreign currency trading, the dollar lost 0.8% to a Bank of Israel rate of 3.821 shekels as expectations for a U.S. interest rate hike anytime soon diminished. The euro weakened 0.5% to 4.369. (Omri Zerachovitz)

Major EZchip shareholder opposes Mellanox acquisition

Mellanox Technologies $811 million takeover of EZchip is running into opposition. Raging Capital, a U.S. hedge fund investor holding a 6.5% stake in EZchip said late on Wednesday in a 13D filing with the U.S. Securities and Exchange Commission that it would oppose the takeover, which needs the backing of 75% of EZchip’s shareholders. “We believe that it is in the best interest of all stockholders that [EZchip] attempt to negotiate a materially higher sale price with Mellanox or other potential acquisition candidates, or refrain from selling the business,” New Jersey-based Raging Capital said. Mellanox offered $25.50 a share for EZchip in the proposed merger between the two Israeli companies, which was a 16% premium of the market price at the time. But Raging Capital said the offer undervalues EZchip’s long-term potential value. Shares of EZchip, whose shareholders vote on the offer November 12, were down 0.2% at $25.01 late morning local time in New York. Mellanox shares were up 1.45% at $44.01. (Omri Zerachovitz)

Ben-Bassat warns terror may depress investment

Prof. Avi Ben-Bassat, a former treasury director general and head of research at the Bank of Israel, warned on Thursday that the wave of violence Israel is feeling threatens to depress investment by slowing economic growth. He compared the situation now to the second intifada, which saw per capita gross domestic product slump 15% as Israel suffered its worst recession ever. “”We’re right now in a potentially worse situation because the economy is already in a slowdown and the main reason in the slowdown is investment,” Ben-Bassat said, noting that investment dropped 4.5% in 2014 and 8% and 3.3% in the first two quarters of 2015. “The economy was already heading into a slump and now we’re adding to it the uncertainty of a wave of terror, which could be disastrous for investment,” he said. (Meirav Arlosoroff)