Business in Brief: Israel Selling Up to $2 Billion in Bonds in New York

Mega bidding deadline delayed until Friday; shareholder advisers offer conflicting opinions on Nestle offer for Osem; Tel Aviv shares drift higher.

The Israeli flag hangs outside the New York Stock Exchange on Wall Street in New York December 1, 2014.
Reuters

Israel selling up to $2 billion in bonds in New York

Israel was selling two tranches of dollar bonds in New York on Wednesday — a 10-year issue and a follow-on sale of a 30-year issue originally sold in 2013 — for a total of between $1.5 billion and $2 billion. The 10-year bond was being marketed at 110 basis points area over U.S. Treasurys, 10 points less than expected, while the 30-year debt was being sold at about 155 points above Treasurys, down from an initial 165 points. Barclays, Citigroup and Goldman Sachs are the lead managers. Israel is rated A1 by Moody’s, A+ by Standard & Poor’s and A by Fitch. Israel last sold dollar bonds in January 2013, when it raised $2 billion in 10- and 30-year debt. A year later it sold 1.5 billion euros ($1.65 billion at current exchange rates) of 10-year bonds. Israel doesn’t need foreign currency; the issue will be used to roll over debt, the Finance Ministry said. (Moti Bassok)

Mega bidding deadline delayed until Friday

The deadline for bidders to submit their offers for the Mega chain of supermarket was pushed back Wednesday for a fourth time — until Friday — to give interested groups more time. Court-appointed trustees for the food retailer who are conducting the auction, attributed the latest delay to “recent developments and the addition of new interested parties,” which sources said referred to a last-minute bid being prepared by Shalom Simhon, a former agriculture minister, and Shlomi Parizat, a former Antitrust Authority official. They said others may also make offers after they learned Tuesday that the supermarket chain Rami Levy had submitted a bid of between 100 million shekels and 150 million shekels ($25.7 million to $38.5 million). The Rami Levy bid is so far the only one to be submitted formally but the Antitrust Authority issued a preliminary opinion Wednesday saying it would block the discount chain from buying Mega. Rami Levy shares rose 0.6% to close at 15.98 shekels (Adi Dovrat-Meseritz).

Shareholder advisers offer conflicting opinions on Nestle offer for Osem

Shareholder advisory services differed over whether investors should accept a Nestle offer to take Israeli food maker Osem private. Emda Research said Wednesday the offer of 82.50 shekels ($21.20) a share was fair, adding that new rules favoring import competition combined with food retailers’ growing power over manufacturers would undermine  Osem’s pricing power going forward.  But earlier this week, Entropy Consultants said that Nestle’s valuation was too low. The offer gives Osem an enterprise value of 13.4 times earnings before interest, tax, depreciation and amortization, which Entropy said was less than the average of 15.6 for Nestle’s eight large deals in the past 15 years. The two opinions comes a month after the Swiss company, which now owns 63.7% of Osem, offered 3.3 billion shekels for the remainder of the shares in a deal that values the company at 9.13 billion shekels. Shares of Osem, whose management is backing the offer, ended down 1.1% at 79.89 shekels (Yoram Gabison)

Tel Aviv shares drift higher

Tel Aviv shares drifted higher Wednesday, following the trend in world markets, although bank and technology shares missed out on the advance. The benchmark TA-25 index finished the session up 0.4% at 1,466.47 points, while the broader TA-100 index added 0.3% to 1,259.62. Turnover was 1.25 billion shekels ($320 million). A handful of blue chips scored big gains — Teva Pharmaceuticals ended 1.3% higher at 22.30 shekels, Bezeq closed up 1.7%, at 8.90 shekels and Israel Chemicals finished up 1.1%, at 17.44. Property companies gained on strong earnings reports. Amit Investments finished 4.15% higher at 13.04 after it said it boosted 2015 net profit 62% to 410 million shekels. Mall operator Melisron said its net finished 29% higher at 685 million last year and its share price rose 2.9% to close at 133 shekels. In foreign currency trading, the euro weakened more than 0.5% to a Bank of Israel rate of 4.288 shekels. (Ruti Levy)