Teva Pharmaceutical Industries in southern Israel, December 14, 2017.
Amir Cohen/Reuters

The Ticker: Shares Slump on Teva and Wall Street

Police raid Shapir offices, question four ■ Fattal Hotels cuts valuation on IPO by 25% ■ Starwood Retail files to sell a billion shekels in bonds in Tel Aviv

Shares slump on Teva and Wall Street

Tel Aviv shares took another hit on Thursday as shares of Teva Pharmaceuticals slumped and U.S. stocks turned lower in early trading. The benchmark TA-35 index fell 1.3% to close at 1,478.52 points, while the TA-125 lost 1.2% to 1,341.83, on turnover of 1.71 billion shekels ($490 million). In foreign currency trading, the dollar strengthening 0.4% to just short of 3.50 shekels, marking a gain of 3.25% over the last two weeks. Leading stocks down, Opko Health dropped 6.7% to 14.38 shekels and B Communications 4.3% to 58.79. Finance shares were sharply down, with Bank Hapoalim off 1.9% to close at 24.91 and Mizrahi Tefahot Bank down 2.4% at 64.43. But Elbit Systems rallied, rising 4.2% to top TA-125 gainers and end at 506. Sapiens fell 0.5% to 42.31 after announcing it was buying Adaptik for $20 million. (Guy Erez)

Police raid Shapir offices, question four

Israeli police raided the Petah Tikva offices of Shapir Engineering on Thursday seeking documents in connection with its Romanian business, the company told the Tel Aviv Stock Exchange. In addition, the four brothers who control and manage the company – Harel, Israel, Gil and Chen Shapira – were called in for questioning under caution, police said. Romanian authorities have been conducting a criminal investigation of a local subsidiary of the company, Shapir Structures Romania, and its CEO Avraham Morgenstern for alleged bribery in connection with a major construction project. Last year Morgenstern and the unit, which went into liquidation in 2014, were convicted on tax violations amounting to about $14 million. A year ago, Israeli prosecutors said they were probing suspicions that Morgenstern had bribed a Romanian official, reportedly a mayor who was paid 175,000 euros ($215,000) to smooth the way for a residential building project. Shapir shares ended down 3.1% at 13.21 shekels. (Eran Azran)

Fattal Hotels cuts valuation on IPO by 25%

Fattal Hotels on Thursday cut the minimum valuation of its initial public offering on the Tel Aviv Stock Exchange by 25% before the offering’s institutional tranche on Monday. Sources noted that the revised valuation of 3.4 billion shekels ($977 million) – a figure that falls even lower counting discounts to institutional investors – is a minimum and if demand for the IPO is strong, the final valuation could rise to at least 4 billion shekels. They called the 4.5 billion minimum valuation Fattal had offered when it began its roadshow a starting point for negotiations with the institutions, rather than a final number. It had been based on multiples traded at by hotel companies in Europe, where Fattal has most of its operations. But investors countered that the company’s exposure to their more volatile Israeli market, as well as some issues for accounting transparency, meant the company should be valued at a discount to European peers. (Eran Azran)

Starwood Retail files to sell a billion shekels in bonds in Tel Aviv

Starwood West, a U.S. owner and manager of shopping malls that belongs to the Starwood Capital Group hotel and real estate empire, filed a prospectus on Thursday to sell approximately 1 billion shekels ($290 million) in bonds on the Tel Aviv Stock Exchange and began a roadshow with investors. The issue will be among the biggest of 30-odd American property companies that have tapped the TASE for some 20 billion in debt capital since 2012, taking advantage of low interest rates. The Starwood group is led by Barry Sternlicht. Starwood West, the unit issuing the bonds, has a portfolio of seven malls around the U.S. valued at a combined $1.7 billion boasting a 97% occupancy rate. It’s part of a much larger portfolio of 30 malls valued at $6 billion belonging to Starwood Retail Partners. Poalim IBI, Leumi Partners and Uri Eisenberg are managing the issue. (Michael Rochvarger)


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