The Ticker: Teva Prices Giant Bond Sale Amid Strong Demand

Strauss faces Coca-Cola as rival in key Brazilian coffee market; Delek in talks to sell Ashkelon power plant.

Trucks drive in front of Teva Pharmaceutical Logistic Center in the town of Shoam, Israel.
AP

Strauss faces Coca-Cola as rival in key Brazilian coffee market

Strauss Group’s coffee division is getting powerful new competition in its key Brazilian market after Coca-Cola said it was launching its first specialty coffee line under the name Leao, a brand known in Brazil principally for its tea. Leao, which Coca-Cola acquired in 2007, will market roasted gourmet quality arabica beans and ground coffee under the name Cafe Leao starting in the next few weeks in supermarkets in Rio de Janeiro, Sao Paulo and Curitiba. It will be sold nationally beginning in January, Coca Cola Brazil said. Tres Coracoes, Strauss’ joint venture with a local partner, is the market leader in Brazil, where it has a 23% share. Brazil is a major profit center for Strauss. Sources at Strauss said Coca Cola’s entry would spur an industry consolidation and encourage consumers to move to premium coffees with higher margins. Strauss shares ended down 1.6% at 60.70 shekels ($15.72). (Yoram Gabison)   

Teva prices giant bond sale amid strong demand

Teva Pharmaceuticals said on Tuesday it successfully priced a debt offering for $15 billion worth of senior notes at rates as low as 1.4% to help fund its acquisition of Allergan’s generic drug business. The pricing came a day after Reuters reported that the sale met unusually strong demand of $70 billion. “The strength of the demand, which was multiple times the size of the offering, and the attractive prices, are a testament to Teva’s financial strength and strong reputation with investors,” said Eyal Desheh, Teva’s chief financial officer. The fixed-rate notes mature between 2018 and 2046, with rates ranging from 1.4% for the earliest redemptions to 4.1% for the latest. Teva said additional senior, unsecured benchmark-sized offerings of euro and/or Swiss franc-denominated multi-tranche debt securities are being contemplated, subject to market conditions. The net proceeds from the offering, which Teva had previously said would be $22 billion, will be used towards paying the cash portion of its $40.5 billion Allergan purchase. Teva shares ended down 0.5% to 209.60 shekels ($54.28). (Reuters)

Delek in talks to sell Ashkelon power plant

Delek Group said on Tuesday it is in advanced talks to sell its IPP Ashkelon power station to a group of investors for about 200 million shekels ($52 million) as its divests its non-core businesses to focus on energy. In a statement to the Tel Aviv Stock Exchange, Delek described the potential buyers only as a “group of institutional and private investors.”  However, sources told TheMarker last month that Delek was in parallel talks to sell the plant to the investment unit of Clal Insurance, and to sell a second one called IPP Soreq to Hong Kong-based Hutchison Water for as much as 150 million shekels. The 87-megawatt plant near Ashkelon is adjacent to a huge desalination plant in which Delek is also a partner. The two power plants are the last of five that Delek developed alone or with partners over the years after it sold stations in Nilit, Alon Tavor and Kiryat Gat. Shares of Delek rose 1.1% to finish at 802.70 shekels. (Eran Azran)

Tel Aviv shares edge higher in quiet trading

Tel Aviv shares edged higher in very quiet trading on Tuesday even as European and U.S. shares fell. The benchmark TA-25 index squeezed out an 0.06% gain to 1,459.22 points while the TA-100 was up 0.15% to 1,270.40 on turnover of just 837 million shekels ($216.8 million). Energy shares offered the only action as Hanal jumped 12.5% into 28.89 shekels and Naphtha rose 7% to 21.86 on news that they would be merged into their parent company Isramco, a partner in the Tamar gas field. TowerJazz led losers on the TA-100 on a 2.6% decline to 49.70 shekels. Other big gainers were Kenon Holding, which rose 3.9% to 43.51 and IDB Insurance, which rose 2.7% to 183.50. Bank shares were up after IBI Israel Brokerage & Investments said in a report that the Strom banking reforms would have little short-term impact on the sector.(Omri Zerachovitz)