The Ticker: Dan Hotels Executives Questioned by Police in Tax Investigation

U.S. investment funds Advent, Bain said to be in talks to buy Isracard | Clal unit with stake in beverage maker Jafora raises NIS 230 million in IPO | Stock exchange asks banks to extend deadline to sell their stakes | Tel Aviv shares end higher, but just barely

King David Jerusalem Hotel, owned by Dan Hotels
Thomas Coex/AFP

U.S. investment funds Advent, Bain said to be in talks to buy Isracard
The U.S. investment funds Advent International and Bain Capital are reportedly in talks to buy Isracard, Israel’s biggest credit card issuer, from Bank Hapoalim. No details about the terms were immediately available, but Hapoalim has reportedly asked the two buyers to sign an exclusivity agreement that would bar them from entering negotiations with Bank Leumi to buy its Leumi Card subsidiary. The Israeli financial daily Calcalist said Leumi has received several offers from Leumi Card, but none that exceeded 2 billion shekels ($560 million). By contrast, Isracard is expected to fetch around 3 billion shekels. Both banks face a government deadline of early 2020 to sell their credit card businesses as part of a drive to introduce more competition into the banking industry, especially for consumer loans.  Hapoalim, which controls 98.2% of Isracard, has set a Monday deadline for initial offers. Hapoalim shares finished down 0.04% higher at 24.65 shekels. (Michael Rochvarger)


Dan Hotels executives questioned by police in tax investigation
Dan Hotels, whose properties include the legendary King David in Jerusalem, said Wednesday it was being investigated by tax authorities and that several top executives had been called in for questioning. A day earlier its offices were raid by investigators and computers confiscated. Neither Dan nor the Israel Tax Authority would provide further details, but investigators reportedly suspect the company of allowing Israeli guests at its hotels to claim the exemption from Israel’s 17% value-added tax that only foreign tourists are permitted to claim. Dan, which operates 13 hotels with a combined 4,000 beds, said in a statement to the Tel Aviv Stock Exchange that there was “no legal or factual basis” for the suspicions.  Among those called in for questioning were Dan’s top financial officer and comptroller, but not CEO Ronen Nissenbaum. Shares of Dan Hotels, which rose 16% in the past 12 months, ended up 0.1% at 21.47 shekels ($5.98). (Eran Azran)


Clal unit with stake in beverage maker Jafora raises NIS 230 million in IPO
Clal Industries & Beverages, a special purpose company spun off from Clal Industries that holds a 30.5% stake in soft-drink maker Jafora, raised 230 million shekels ($64.1 million) in the institutional tranche of an initial public offering Wednesday. The sale of a 46% stake in Clal Industries & Beverages garnered orders of more than 545 million shekels from institutions and valued Jafora at 1.64 billion shekels. Clal opted for the IPO as a fallback for divesting its Jafora stake after it failed to agree on a price for the shares with Jafora’s other shareholder, Kerur Holdings, to buy the beverage maker. The IPO suggests that both sides were wrong by a wide margin, as Clal believed Jafora was worth 2 billion shekels and Kerur valued it at 1.2 billion. The final price of the Clal Industries & Beverages shares will be set in the public tranche of the offering. (Yoram Gabison)


Stock exchange asks banks to extend deadline to sell their stakes
The Tel Aviv Stock Exchange said Wednesday it had asked Israeli banks to extend the deadline for an agreement to sell their shares in the bourse after the Israel Securities Authority requested more time to vet the buyers. “We have asked the banks to extend this deadline to the end of August,” a spokeswoman said. The delay comes as regulators examine a deal announced in April in which the U.S.-based investment fund Manikay Partners would buy 19.9% stake in a deal valuing the exchange at 551 million shekels ($153 million). An additional 21.8% is to be acquired by a group of international investors. The TASE demutualized in September, becoming a for-profit bourse and offering to buy out its bank shareholders. It received commitments from member banks to buy back 71.7% of their shares by June 19. First International Bank of Israel said in a separate statement it was examining the bourse’s extension request. (Reuters)


Tel Aviv shares end higher, but just barely
The Tel Aviv Stock Exchange’s TA-35 index kept its head barely above the red waters Wednesday thanks to gains from Teva Pharmaceuticals and Israel Chemicals. The index ended up 0.1% at 1,540.30 points, while the TA-125 edged up just 0.09% to 1,392.62, on turnover of 1.16 billion shekels ($320 million). Teva extended the gains it has enjoyed all this week, adding 1.5% to end at 86.70 shekels. Israel Chemicals rose strongly for a second day, climbing 2.6% to 17.65. ILDC jumped 4.4% to 34.84 after Entropy tagged the stock a Market Outperform with a target price of 48.20. Frutarom ended unchanged at 352.20 despite an apparent no vote on its planned merger with International Flavors & Fragrances: The giant U.S. fund manager Fidelity sold 1.3 million of its 4.3 million Frutarom shares at 342.19 each. Bezeq group shares sank: Internet Gold fell8.1% to 11.36, B Communications 4.5% to 37.60 and Bezeq itself 3.5% to 4.09. (TheMarker Staff)