The Ticker: Giant Tamar Petroleum IPO Fails to Attract Much Interest

European Union charges Teva with illegal deal on generic drugs; Dollar and euro surge in late trading against the shekel; State stands to profit by NIS 380m from delaying Leumi share sale

An employee of Teva Pharmaceutical Industries at a Jerusalem plant.
Ronen Zvulun/REUTERS

Giant Tamar Petroleum IPO fails to attract much interest

The Tamar Petroleum initial public offering – the biggest ever on the Tel Aviv Stock Exchange – ended with a thud on Monday amid tepid demand, especially from the foreign investors underwriters hoped to lure in. The offering drew only $250 million of orders, four-fifths of it from Israeli institutions and virtually none from foreigners, for whom dedicated road shows had been organized. In the end, only $200 million of stock was sold in the company, which was formed by Delek Group to buy its stake in the Tamar natural gas field, at the minimum price. Delek Drilling took a 40% stake in the company as it committed itself to in the event of tepid demand for the IPO. Now it hopes its valuation will eventually climb and it can sell the stock at a profit. Sources said the valuation in the IPO was excessive. Tamar Petroleum will use the proceeds to buy a 9.25% stake in the gas field. (Eran Azran)

European Union charges Teva with illegal deal on generic drugs

European Union antitrust regulators charged Teva Pharmaceuticals on Monday of making an illegal deal with Cephalon to delay selling a cheaper generic version of the latter’s sleep disorder drug, putting it at risk of a fine. Teva reached the deal with Cephalon as part of a settlement to end a lawsuit over alleged infringement of Cephalon’s patents on the blockbuster drug Modafinil. This involved cash payments from Cephalon, which Teva later acquired in 2011. “The patent settlement agreement between Cephalon and Teva may have caused substantial harm to EU patients and health service budgets,” the EU competition enforcer said in a statement. Teva said it strongly disagreed with the Commission’s analysis on such deals. Teva, which can ask for a closed-door hearing to defend its case, can be fined up to 10% of its global turnover if found guilty. The company had revenues of $21.9 billion in 2016. Teva shares ended down 0.2% at 113.70 shekels ($31.75). (Reuters)

Dollar and euro surge in late trading against the shekel

The dollar and euro each gained more than 1% against the shekel in late trading on Monday, as the foreign currency market reacted to the unexpected decline in Israel’s June consumer price index, published Friday. The euro strengthened nearly 0.7% to a Bank of Israel rate of 4.0638 and had pushed past 4.1085 in late trading. The dollar also advanced, albeit more modestly, to 3.5450, but in late trading was at 3.581 shekels. The surprise 0.7% decline in the CPI caused economists to push back their forecast for an increase in the Bank of Israel’s base lending rate to as far as 2019. Alex Zabezhinsky, chief economist at Meitav Dash, said Bank of Israel Governor Karnit Flug’s tough talk on interest rates also helped weaken the shekel. “Flug said she wouldn’t raise interest rates even if other world central banks did. She also signaled that the Bank of Israel would intervene to neutralize global expansionary monetary policies,” he said. (Guy Erez)

State stands to profit by NIS 380m from delaying Leumi share sale

The Israeli government stands to profit to the tune of 380 million shekels ($106 million) from its failure to keep to its own deadline for selling a 5.8% block of Bank Leumi shares it still controls. The Knesset Finance Committee set a one-year deadline to sell the stock in June 2014, but the Finance Ministry’s then-accountant general, Michal Abadi-Boiangiu, never sold the shares and her replacement, Rony Hizkiyahu, has yet to be installed as chairman of the government-owned company that owns the shares. Meantime, Leumi’s share price has risen from 13.70 shekels when the finance committee approved the sale to 17.80, raising the value of the government’s stake to 1.6 billion shekels. Adding the dividends the state has collected, the return comes out to 380 million shekels. The government is reportedly waiting to sell the shares until Judge George Kara rules on whether to approve criminal proceedings against the bank and senior executives for their role in helping U.S. citizens evade taxes. (Michael Rochvarger)

Tel Aviv shares turn lower after six sessions of gains

Tel Aviv shares ended a six-session winning streak on Monday as Bezeq group companies led a broad decline in shares. The blue chip TA-35 index sank 0.2% to 1,456.86 points, while the TA-125 lost 0.35% to 1,311.10, on turnover of just over 1.3 billion shekels ($370 million). Among the bigger losers was Industrial Building Corporation Ltd, which dropped 4.6% to 4.74 shekels after the property company said it would sell between 150 million and 200 million shekels in new shares to expand its float and remain in the index. That is equal to about 8% of its share capital. Ceragon lost 2.7% to 9.69. B Communications led the decline on Bezeq group shares (see story on this page), declining 2.8% to a close of 56.10. Mannkind led gainers on the TA-125, rising 7.4% to 4.70 after it named a new chief financial officer, Steve Binder. TowerJazz marked a third day of gains, adding 1.9% to end at 94.99. (Guy Erez)