Delek Group Rises to Record on Unit’s Share Sale: Tel Aviv Mover

Delek Group Ltd. (DLEKG) rose to a record after the company said the sale of a unit’s shares would result in a profit and on bets an offer to buy the outstanding stock in another subsidiary will succeed.

The shares of the group, whose interests include the off-shore Leviathan and Tamar natural gas sites, climbed 3.7 percent to 1,112 shekels by the close of trading, the highest level since listing on the Tel Aviv bourse in February 2000. The volume was 2.4 times the three-month daily average, with the stock gaining the most by percentage points on the benchmark TA-25 (TA-25) Index, which slipped 0.1 percent.

Delek Group said on Aug. 18 it would post a profit of 450 million to 500 million shekels in the second quarter following the sale of shares in Delek US (DK) Holdings Inc. Earlier this month, it offered to buy the outstanding stock of Delek Energy Systems Ltd. (DLEN) in which it already holds an 87 percent stake, according to data compiled by Bloomberg.

The sale of Delek US shares “is generating significant profit for the company,” Ella Fried, a senior analyst at Bank Leumi Le-Israel Ltd. in Tel Aviv, said by phone today.

The result of the offer made on Delek Energy’s stock is expected on Aug. 28, Itay Gore, a spokesman for Delek Group, said by phone today.

“Some investors are also optimistic about a positive outcome of a buyback offer for Delek Energy shares, which if successful will enhance efficiencies and flatten the company’s holding structure,” Fried said.

The group’s shares have more than doubled in the past 12 months, compared with a jump of 9.3 percent in Israel’s benchmark gauge, as the Tamar gas field started production in March and the group sold non-energy assets to focus on its oil and gas business. It has offloaded stakes in Delek Automotive Systems Ltd. (DLEA) and Delek US in the past year.

Delek Group owns shares in the Tamar and Leviathan fields via stakes in Delek Drilling-LP (DEDRL) and Avner Oil Exploration LLP. (AVNRL) Delek Drilling advanced 2.1 percent today and Avner gained 2.5 percent.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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