The Ticker: Leumi to Sell 15% of U.S. Unit to Two Strategic Investors

Teva reports disappointing results from asthma drug trials ■ Discount transfers 5% Cellcom stake to two Elsztain allies to conform with law ■ Delek’s Ithaca unit sells oil field to help pay down debt ■ Teva, Israel Chemicals give a lift to Tel Aviv shares

A Bank Leumi branch in Tel Aviv, January 24, 2016
Ofer Vaknin

Leumi to sell 15% of U.S. unit to two strategic investors

Bank Leumi has agreed to sell a 15% stake in its subsidiary Bank Leumi USA for $141 million to two strategic investors, who will bring the bank expertise in U.S. financial services, Israel’s second-largest lender said on Monday. The investors are Endicott Capital Management, a U.S. investment firm co-founded by Wayne Goldstein in 1996 to invest in financial institutions, and MSD Capital LP, the private investment arm of Dell Technologies founder Michael Dell. “After examining several options, we decided to partner with Endicott and MSD Capital, which can bring significant advantages to BLUSA, including expansion of its customer base, greater access to the U.S. capital markets, and the ability to leverage Endicott’s significant experience in the U.S. financial markets,” Leumi CEO Rakefet Russak-Aminoach said. If the shares are not listed 4-5 years after completion of the deal, the partners will have an option to sell them back to Leumi. Leumi shares ended up 0.9% at 21.29 shekels ($6.23) (Reuters)

Teva reports disappointing results from asthma drug trials

Teva Pharmaceuticals said on Monday that a clinical trial of an asthma treatment it is developing failed to meet its main goal. “We are disappointed that these trials of the reslizumab formulation administered subcutaneously at a fixed dose of 110 milligrams did not meet their primary endpoints,” said Teva Senior Vice President Tushar Shah. One of the studies was focused on reducing the frequency of clinical asthma exacerbations and the other, on reducing the daily oral corticosteroid dose in patients with OCS-dependent asthma. Despite terming the results disappointing, the company said the trials uncovered no safety issues with reslizumab and that it would review the data to consider what follow-up steps to take. Since March 2016, Teva has U.S. approval to sell an intravenous version of the drug, which is marketed as Cinqair, which won’t be affected by the trial’s results, he added. Shares of Teva finished up 1.3% at 70.98 shekels ($20.78). (TheMarker Staff)

Discount transfers 5% Cellcom stake to two Elsztain allies to conform with law

Discount Investment Corporation, the holding company controlled by Argentine real estate magnate Eduardo Elsztain, sold a 5% stake in its Cellcom Israel unit to meet a rule that at least 5% of a telecoms company’s share be held by Israeli nationals. In fact, the shares were acquired by two close associates of Elsztain’s – Mauricio Wior, a Cellcom vice chairman, and Mario Blejer, an alternate director of another Elsztain company, IDB Development Corporation. The two now have the right to appoint up to 10% of Cellcom’s board, which currently amounts to a single director, but the two are required to vote as instructed by Discount and cannot freely sell their stock to a third party. Elsztain has been under orders to put a 5% stake in the hands of an Israeli shareholder since he parted ways with the Israeli-German entrepreneur Moti Ben-Moshe. Cellcom shares ended down 1.2% at 33.74 shekels ($9.88). (Shelly Appelberg)

Delek’s Ithaca unit sells oil field to help pay down debt 

Several months after buying control of the North Sea oil producer Ithaca Energy, Yitzhak Tshuva’s Delek Group said on Monday that Ithaca was selling assets to help pay down some $715 million in debt. The company agreed to sell its entire interest in licenses PL089, P534 and PEDL 328, which contain the onshore Wytch Farm field, to Verus Petroleum SNS Limited for $53 million in cash. The sale will also release Ithaca from a $16 million letter of credit posting against future Wytch Farm decommissioning liabilities. Average production at Wytch Farm last year was approximately 1,000 barrels of oil per day net to Ithaca and the reserves associated with the licenses were 4.8 million barrels as of the end of 2016. Ithaca is both losing money and is highly leveraged, with Delek’s direct exposure coming to $600 million – enough to risk Delek’s credit rating. Shares of Delek nevertheless ended down 1.8% at 628.30 shekels ($183.97). (Eran Azran)

Teva, Israel Chemicals give a lift to Tel Aviv shares

Tel Aviv shares ended higher on Monday, getting a lift from gains by Teva Pharmaceuticals, Israel Chemicals and the property company Melisron. The benchmark TA-35 index rose 0.3% to close at 1,531.46 points, while the TA-125 added nearly 0.5% to 1,399.50 points on turnover of 1.28 billion shekels ($370 million). Israel Chemicals rose 2.2% to close at 14.95 shekels and Melisron rose 3.6% to 154.30 shekels. Bezeq drooped 1.9% to 5.69 shekels after Excellence Securities reiterated its Neutral rating on the stock, saying the upside from U.S. activist investor Elliott Management’s intervention could be positive for the stock but that it was already built into its current price. Phoenix climbed 1.4% to 20.14 shekels after reporting that it received commitments from institutional investors to buy bonds amounting to 270 million shekels. Super-Sol, Israel’s largest supermarket chain, dropped 0.55% to 23.64 shekels. It raised 567.5 million shekels ($166 million) in a bond offering. The dollar strengthened 0.4% to a representative rate of 3.410 shekels. (Shelly Appelberg)