The Ticker: Tel Aviv Shares Join Global Market Downturn

Labor Court declines to intervene in Tel Aviv Stock Exchange slowdown; Gazit Globe sells control of ailing U. Dori Group for just 10 million shekels.

The entrance of the Tel Aviv Stock Exchange.
Bloomberg

Tel Aviv shares join global market downturn

Tel Aviv shares fell sharply on Thursday as world markets slumped amid concerns about China and a slowing global economy. European equities slumped to a 13-month low, with the automobile industry leading the market lower. Wall Street rallied, but that was too late to affect Tel Aviv. The TA-25 index ended down 2.9% at 1,454.40 points and the TA-100 lost 3% to 1,248.15. Turnover was 1.7 billion shekels ($430 million). Energy and technology stocks took the brunt of the decline. Delek Drilling finished down 5.2% at 10.51 shekels and Ratio tumbled 6.7% to 24 agorot as oil prices touched new lows. TowerJazz led TA-100 tech stocks lower, shedding 7.7% to 47.28. Teva Pharmaceuticals slumped 3.5% to 246 shekels and Israel Chemicals ended down 2.6% at 14.80. El Al Airlines dropped sharply for a second day, losing 8.9% to 2.66 shekels. MannKind, however, ended higher for a fourth day running, jumping 6.2% to 3.41. (Ruti Levy)

Labor Court declines to intervene in Tel Aviv Stock Exchange slowdown

Tel Aviv District Labor Court Judge Ravit Sadik declined yesterday to intervene in sanctions by Tel Aviv Stock Exchange employees that are interfering with work on a tie-up with the Nasdaq stock market. Sadik didn’t accept management claims that the action hurt the exchange’s operations. She told the parties to keep talking, but erred when she said, “There’s no trading on Sunday, so you have time to sit and talk.” The TASE trades Sunday through Thursday. Beni Cohen, representing the TASE union local, told the court the work action was over fears that the impending restructuring of the TASE into a for-profit company would lead to layoffs. “A change like this needs to be done with the consent of the union,” Cohen said. Lawyers for the TASE said the Nasdaq project, which aims to help young high-tech companies, had nothing to do with the restructuring plans and workers had no reason to boycott it. (Shelly Appelberg)

Gazit Globe sells control of ailing U. Dori Group for just 10 million shekels

Amos Luzon, one of the owners of the Maccabi Petah Tikva soccer team, has acquired control of the financially troubled U. Dori Group from Gazit Globe, TheMarker has learned. Luzon paid just 10 million shekels ($2.5 million) for 77% of the group, with the rest of Gazit’s 85% stake to be sold on the Tel Aviv Stock Exchange. Luzon, who is best known for his sports-related activities but owns a shopping mall and is a partner in several residential building projects, is taking on a major risk with Dori, whose debts are still be sized up by auditors and may require substantial infusions of capital. Apart from Dori Construction, the indebted building arm of the group, Luzon will get control of the group’s 18.75% stake in private power company Dorad and Polish property developer Ronson. The sale comes a day after Gazit said it would sell the group after injecting 750 million shekels into the company in the past 18 months. (Eran Azran and Michael Rochvarger)

Formula, Israel Aerospace Industries agree to buy Ness Technologies’ defense unit

Formula Systems and the state-owned Israel Aerospace Industries said yesterday they had agreed to buy the military arm of Ness Technologies for $50 million in cash. The two companies said they would each control half of TSG, which makes core command and control systems for the Israeli Defense Forces and the Israel Police among others. “The acquisition of TSG, a leader in its field, adds a significant fourth leg to Formula’s portfolio, extending our reach to the defense and growing cyber security industries,” said Formula CEO Guy Bernstein. TSG is a small company in the defense field and its products are usually integrated into bigger systems, so that a tie-up with IAI should help it increase sales, while being half-owned by Formula will enable it to avoid the burdens of being a state-owned company. Shares of Formula  ended down 3.4% at 99.23 shekels ($25.15).  (Omri Zerachovitz)