The Ticker: Mellanox Turns in Unexpectedly Strong Quarterly Results

Four stock exchange shareholders agree to sell shares back to bourse ■ Control of Elco split between male heirs, leaving daughter out ■ Together shares reach new high on cannabis deal with Germany ■ TA-35 index ends lower after end-of-session drop

Mellanox offices in Yokne’am, August 12, 2013
Ofer Vaknin

Embattled Mellanox turns in unexpectedly strong quarterly results

Mellanox, the Israeli maker of semiconductors under pressure from activist investor Starboard to improve its tepid earnings, turned in a strong fourth-quarter financial report. The company said on Thursday that adjusted earnings came to 82 cents a share in the fourth quarter, unchanged from a year earlier but well above the 68 cent average forecast by analysts surveyed by Zacks Investment Research. Revenue climbed 7.2% to $237.6 million, compared with forecasts for $235.3 million. For the current quarter, Mellanox said it expected revenue in the range of $222 million to $232 million, above average forecasts of $221.1 million. Christopher Rolland of Susquehanna raised his target to $80 from $75. Starboard has pressed Mellanox CEO Eyal Waldman to boost profits since it amassed a 10.7% stake in the company in November and last week proposed its own slate of nine candidates for the Mellanox board. Mellanox shares rose 2.25% Thursday and Friday to $65.75 on Wall Street. (Guy Erez)

Four stock exchange shareholders agree to sell shares back to bourse

Nearly three quarters of Tel Aviv Stock Exchange shareholders agreed over the weekend to sell back shares to the bourse as the TASE moves forward with a planned initial public offering. The exchange earlier this month offered to buy out its commercial and investment bank shareholders at a 500 million shekel ($146 million) valuation. Bank Hapoalim said it agreed to sell its 11.6% stake for 58 million shekels and Bank Leumi its 9.3% share for 46 million. First International Bank of Israel, the country’s fifth biggest lender and biggest TASE shareholder, said it would sell back 15.4% of its 20.3% stake and said the sale would generate a large, though unspecified, capital gain. Tiny Bank of Jerusalem said it would sell its entire 5.39% stake and investment house Meitav Dash agreed to sell its 5.3% holding. The TASE demutualized and became for-profit in September as part of a plan to boost trading volumes and company listings. (Michael Rochvarger)

Control of Elco split between male heirs, leaving daughter out

The late Gershon Salkind left control of Elco, the maker of electro-mechanical equipment and appliances, with his two sons but not his daughter. Under the terms of a will approved by Tel Aviv District Court late last week, Michael and Daniel Salkind get equal stakes in the family company that owns 64.4% of publicly traded Elco. However, their sister Dafna Sessler, a veterinarian, said she wasn’t unhappy about the will. “It’s nothing terrible – you don’t need to understand everything,” she said in response to a call seeking comment. Sessler reportedly got all her father’s other holdings, which include real estate and cash, a source told TheMarker, although he couldn’t confirm that the value was equal to the 700 million shekels ($204 million) each of the brother’s Elco stock is worth. “The father ensured a balance between his children,” the source said. “Because Mikey and Danny had worked with him for years at Elco they got the public shares.” (Eran Azran)

Together shares reach new high on cannabis deal with Germany

Together Startup Network shares reached a new high on the Tel Aviv Stock Exchange Sunday after the medical marijuana company said it had reached a deal to sell five tons of cannabis annually to an unnamed German company. Together – a publicly traded corporation that announced last month it was buying a marijuana grower – said medical cannabis sold in Europe at 6.90 euros ($8.43) a gram, which would add up to 155 million shekels ($45.2 million) of annual revenues. However, Israel hasn’t approved medical marijuana exports and is unlikely to do so before 2019, while Together said the buyer was still awaiting approval from German authorities to import it. Moreover, the contract size implied that Together would control close to 10% of the global market, which a treasury report estimated in 2014 at 57.3 tons. Nevertheless, Together shares ended up 21.1% at 2.23 shekels. (Guy Erez

TA-35 index ends lower after end-of-session drop 

The Tel Aviv Stock Exchange’s TA-35 index took a sudden move lower late in trading on Sunday, although most sectors retained their gains through closing time. The benchmark index ended down 0.4% to 1,527.000, while the TA-125 lost 0.2% to 1,388.01, on turnover of 510 million shekels. Nice stems ended down 3.3% at 316.40 shekels while the Israel Corporation lost 3.1% to 66.430 and its Israel Chemicals unit 1.7% to 14.63. But Bezeq extended its rally, advancing 1.1% to end at 5.80 in heavy trading. It has gained 11% since the start of the month amid a takeover battle for the company. Enlight rose 8% to 1.78  after reporting that it was in negotiations to buy the rights to a 105-megawatt wind energy project in central Europe. In foreign currency trading Friday, the dollar lost all of its gains from earlier in the week, dropping more than 0.6% to a representative rate of 3.4060 shekels. (Shelly Appelberg)