Tel Aviv Tech Shares Track Wall Street Bounce

Business in Brief | Leumi Partners to buy a stake in Aeronautics in post-IPO private placement ■ Navitas Petroleum eyes IPO after following bond offering ■ NeuroDerm shares rally on report company is up for sale

File photo: A man at the Tel Aviv Stock Exchange
BAZ RATNER/REUTERS

Leumi Partners to buy a stake in Aeronautics in post-IPO private placement

Leumi Partners, the investment arms of Bank Leumi, is expected to invest some $15 million in Aeronautics via a private placement conducted immediately after the drone-technology maker’s initial public offering slated for Wednesday. The unusual arrangement is due to Israel’s banking law prohibiting banks from buying into IPOs. The deal is contingent on the institutional tranche of Aeronautics IPO being completed successfully. Leumi will get a 4.5% to 5% stake. Because it is buying the stock via a private placement, Leumi will be barred by law from selling the share for six months and after that can only do so gradually. Aeronautics is being taken public at a valuation of between $290 million and $350 million, mostly in the form of share sales by inside investors, including the private equity funds Bereshit, Viola and KCPS – which together control 77% of the stock today, and the Shaked family. Altogether they will be selling about half their stock at a total of 500 million shekels ($141.7 million). (Michael Rochvarger)

Navitas Petroleum eyes IPO after following bond offering

Navitas Petroleum plans to raise $130 million in bonds followed by an initial public offering on the Tel Aviv Stock Exchange as it expands operations in the Gulf of Mexico and Canada, Chairman Gideon Tadmor said on Tuesday. The company will use the proceeds from the bond offering to fund development and buy a 5% stake in the deep-water project Buckskin in the Gulf of Mexico, which holds an estimated 490 million barrels of recoverable oil, said Tadmor, who previously managed the Delek Group’s energy business. The IPO will value Navitas, which has stakes in 12 oil and gas projects in the Gulf of Mexico and Canada, at approximately $100 million, according to a prospectus. “After two and a half years of downturn in the upstream sector, there are very interesting investment opportunities,” Tadmor told Reuters. “One of our advantages is our ability to source both equity and financing from the Israeli capital market to cherry pick exciting projects.” (Reuters)

NeuroDerm shares rally on report company is up for sale

Shares of NeuroDerm rallied on the Nasdaq Monday on a report that the developer of a skin patch treatment  to treat Parkinson’s disease was putting itself up for sale. Citing unnamed sources, Bloomberg News said the company is working with an unnamed financial adviser on a sale and has attracted interest from big drug makers with a presence in the business of treating the central nervous system. Valuation for the company, whose market cap has soared to $669 million after its share price rose 47% over the last 12 months, is reportedly the biggest hurdle to a possible deal and the talks may not lead to an agreement, Bloomberg said. The valuation, however, is steep considering that Neuroderm generates no revenues and has run up $181 million in losses. NeuroDerm shares, which jumped 15% on Monday, were trending higher on Tuesday, up 1.8% at $25.44 at noon local time in new York. (Yoram Gabison)

Tel Aviv tech shares track Wall Street bounce

Tel Aviv shares finished Tuesday higher as the Dow Jones Industrial Average hit an all-time high and technology shares rebounded from a selloff. The blue chip TA-35 index ended 0.3% up at 1,425.32 points, while the TA-125 added nearly 0.7% to 1.288.88, on thin turnover of just 971 million shekels ($275 million). Tech shares ended up sharply. Mazor Robotics jumped 10.7% to 58.65 shekels, rebounding from a sharp declines promoted by news of a securities investigation involving the company. SodaStream gained 6.6% to 188.10 on reports its CEO, Daniel Birnbaum, bought 20,000 shares and El Al Airlines rose 4.2% to 3.31. Drug stocks faltered. Mylan fell 4.1% to 134, marking a second day of declines after a shareholder-advisory service urged investors to remove the drug maker’s board. Perrigo lost 2.9% to 250 and Teva Pharmaceuticals fell 0.4% to 108.30. Teva said Monday it has launched a generic version of the cholesterol-lowering medication Zetia. Isramco dropped 1.4% to 55.20 in heavy trading and Bezeq rose 1.7% to 6.20. (Uri Tomer)