Ben Dov Selling Stake at Premium Pushes Partner Higher: Israel Overnight

Partner Communications Co. (PTNR) rose the most in two months in New York yesterday after shareholder Ilan Ben Dov said he will sell a stake in Israel’s second-largest mobile phone provider at a premium.

The cellular company jumped 3.8 percent to $8.96 on the Nasdaq Stock Market yesterday. The Israeli shares gained 0.8 percent to 34.47 shekels, or the equivalent of $9.07, at the 4:30 p.m. close in Tel Aviv today. They advanced (PTNR) 3.9 percent in the two days following the announcement on Dec. 25 that Ben Dov, who owns 44.5 percent of Partner through Scailex Corp., will sell part of his holding. The Bloomberg Israel-US 25 Index of the largest Israeli companies listed in New York rose for a third day, led by Prolor Biotech Inc. (PBTH)

Rosh Ha’Ayin, Israel-based Partner is the worst performer (TA-25) among members of the Tel Aviv benchmark TA-25 Index this year as the government steps up efforts to boost competition in the local cellular market and on mounting concern about Ben Dov’s investment company Tao Tsuot Ltd.’s debt problems.

“It’s pretty rare for a company to say they’ll sell at a significantly higher price in the official announcement,” said Uriel Goren, head of the international clients desk at DS Securities & Investments. “The fact that we see tycoons selling stakes doesn’t mean there’s something wrong with these companies, they just need the cash.”

Ben Dov, who bought the stake in Partner for $1.4 billion two years ago, aims to raise funds at a time the Israeli entrepreneur is trying to reach an agreement with bondholders of Tao Tsuot, of which he owns 70 percent. Israeli billionaire Nochi Dankner’s holding company also announced this week that it’s in talks to sell a stake in one of its units at a premium.

Retaining Control

Scailex hired a foreign bank to help sell the Partner holding, according to a statement filed to the Tel Aviv Stock Exchange after the market closed on Dec. 25. The company said it will retain control of the mobile-phone operator.

U.S. investment fund TPG Capital is in talks to acquire a 16 percent stake in Partner, financial daily Calcalist reported today, without saying where it got the information. Scailex didn’t name a possible buyer for its stake in Partner.

Prolor Biotech declined 0.7 percent to 15.60 shekels, or the equivalent of $4.11. The shares in the U.S. gained 4.8 percent to $4.19 yesterday.

The Tel Aviv Stock Exchange is making a push to lure U.S. biomedical companies to dual-list on its shores, Chief Executive Officer Ester Levanon said yesterday.

The bourse aims to attract small- to medium-sized companies, with a value of between $250 million to $300 million and create a hub for biotechnology investors. The TASE, as the exchange is known, had preliminary contacts with the Nasdaq (CCMP) Stock Market and New York Stock Exchange on the issue, she said.

‘Critical Mass’

“Israel has a critical mass of biomed companies,” Levanon said at the bourse’s annual press conference in Tel Aviv yesterday. “There is an interest to bring other companies to list here and attract European investors.”

The exchange initiated the Tel Aviv Biomed Index in March 2010 and it now includes 56 companies.

Israel, whose population of 7.7 million is similar to the size of Switzerland’s, has about 60 companies traded on the Nasdaq Stock Market, the most of any country outside North America after China. It is also home to the largest number of startup companies per capita in the world.

The shekel declined 0.6 percent to 3.7989 a dollar. The currency is headed for a 7.2 percent drop this year, its worst performance since 2002.

Rising Competition

Partner said last month third-quarter profit declined to 172 million shekels ($46 million) from 309 million shekels a year earlier as competition increased.

Israel’s Ministry of Communications, seeking to boost competition in the market, has issued licenses to new mobile telephone and virtual operators, among them Golan Telecom Ltd., a phone company whose partners include Xavier Niel, and Hot Telecommunication System Ltd., through its MIRS Communication Ltd. unit.

Dankner’s IDB Development Corp., which owns about 60.5 percent of Clal Industries & Investments Ltd., is negotiating the sale of a 36 percent stake in the unit, the company said on Dec. 25. The transaction would value Clal at about 3.8 billion shekels, or 24 shekels a share, above the 16.68 shekels close on Dec. 22, according to Noam Pincu, an analyst at Psagot Investment House Ltd. in Tel Aviv.

Allot, Alon

Israel’s benchmark’s TA-25 Index fell 0.7 percent, extending the drop for the year to 16 percent. The Bloomberg Israel-US 25 Index climbed 0.3 percent yesterday to 86.17, paring its decline this year to 17 percent.

Allot Communications Ltd. (ALLT) increased 2 percent to 61.67 shekels, or the equivalent of $16.24. The U.S. shares climbed 3.6 percent to $16.31 yesterday. Allot tumbled 8.1 percent last week in the U.S. after Bloomberg News reported that the company’s gear was sold to Iran and a lawmaker called for an investigation.

Alon Holdings Blue Square-Israel Ltd. (BSI) fell 1.2 percent to 15.91 shekels, or $4.19. The U.S shares dropped 3 percent yesterday to $4.15. The country’s second-largest food retailer signed a mobile-phone services agreement in which the company’s unit, Alon Cellular Ltd., will be able to offer mobile services to end users.

To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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