Tel Aviv Shares Gain as Teva Rallies on Appointment of New CEO

Business in Brief | Alon Group plans IPO by the end of September despite negative equity ■ In about-face, Justice Ministry says it won’t allow IDB to use concentration law loophole ■ Rami Levy’s company rejects media reports about police investigation of Levy

An employee collects pills from a machine at a Teva Pharmaceuticals production plant in Jerusalem, September 19, 2011.
Adam Reynolds/Bloomberg

Alon Group plans IPO by the end of September despite negative equity

Alon Group has begun meeting with investors in the hopes of completing an initial public offering this month. Even though the holding company has negative equity of 913 million shekels ($259 million), Alon is emphasizing in investor presentations that it has a net asset value of 300 million shekels. Under the terms of a debt accord reached in June, if Alon does not raise 120 million shekels by October 1, controlling shareholders Shraga Biran and kibbutz purchasing organizations will cede control to their bondholders. The IPO aims to sell a 60% share with another 25% going to bondholders. In addition, its 1.6 billion shekels in debt will become publicly traded. After losing control of the Mega supermarket chain, Alon’s main assets are a 7.4% stake in Delek USA, 3.8% of the Tamar gas field, 29% of the company that controls Route 6 and other toll roads and 8% of energy retailer Dor Alon. (Eran Azran)

In about-face, Justice Ministry says it won’t allow IDB to use concentration law loophole

In an apparent reversal, the Justice Ministry will not permit Eduardo Elsztain’s IDB Group to use a loophole in the Business Concentration Law to meet the conditions of the legislation. The loophole would let IDB reduce the number of tiers in its corporate structure by selling its Discount Investment Corporation unit to a closely held investment vehicle created by Elsztain. Justice Minister Ayelet Shaked said two weeks ago she would not act to close the loophole, but on Monday Justice Ministry lawyer Ronnie Talmor told the Knesset Finance Committee otherwise. “We have made clear to company representatives that we won’t give a green light or any kind of consent to the move,” she said. “Quite the contrary, we made clear the move contradicts the purpose of the concentration law as we understand it.” Talmor said Shaked had no authority to approve the move in advance. (Zvi Zrahiya)

Rami Levy’s company rejects media reports about police investigation of Levy

Supermarket chain Rami Levy said on Monday that news reports on a police investigation that led to the detention, questioning and release to house arrest of the company’s namesake founder and CEO on Sunday were inaccurate. The discount grocery chain said neither it nor the company that owned the Mevaseret Mall at the center of the probe had received a tax discount or other special treatment related to taxes, including the 21 million shekel ($6 million) betterment tax imposed on the Jerusalem-area shopping center. Regarding the mall’s employment of Liat Shimon, the wife of Mevasseret Zion Local Council head Yoram Shimon, the company said the Shimons were separated when Liat was hired and that she came to the job after 13 years as a mall marketing manager. It added that Oded Bar-Zion, an aide to Yoram Shimon who was hired as the mall’s CEO, is a mall manager by profession. Rami Levy shares ended 1.9% higher to 178.20 shekels. (Adi Dovrat-Meseritz and Jasmin Gueta)

Tel Aviv shares gain as Teva rallies on appointment of new CEO

Tel Aviv shares ended sharply higher on Monday as Teva Pharmaceuticals rallied on news a CEO had been named after a long wait (see story, this page). The blue chip TA-35 index rose 1.4% to close at 1,404.03 points, while the TA-125 added 1.2% to 1,273.77. Turnover was 1.29 billion shekels ($370 million). Israel Chemicals reversed course after dropping sharply Sunday on reports that Potash Corporation of Saskatchewan would sell its 14% stake in ICL. But on Monday Excellence Investment House said the sale would have no impact on the company and retained its 17 shekel price target. ICL shares closed up 4.5% at 15. Insurance stocks were down sharply, paced by a 4.1% drop in Menorah to 39.70 and 2.9% in Clal to 53.31. In the fixed-income market, Bayside raised 423 million shekels in a sale of new bonds and Universal 320 million shekels from an expansion of two existing bond series. (Shelly Appelberg)