Osem Investments Ltd. (OSEM) jumped to a record after Nestle SA (NESN), the world’s largest foodmaker, paid a premium to raise its stake in the Israeli food producer, stoking speculation it may seek a full takeover.
Shares of Osem, which markets Nestle products in Israel, rose 8.2 percent to 80.38 shekels at 1:42 p.m. in Tel Aviv, the highest level since Bloomberg started tracking them in January 1994. The stock was the biggest gainer on the TA-100 Index (TA-100) as volume climbed to 5.7 times the three-month daily average.
Osem Chairman Dan Propper sold most of his 4.99 percent stake to Nestle at 92.67 shekels a share, a 25 percent premium to the closing price yesterday. That builds on Nestle’s existing 59 percent stake in the Shoham, Israel-based company, data compiled by Bloomberg show. Shares of Osem trade at 18 times projected 12-month earnings, compared with a multiple of 13 for the TA-100.
“The move by Nestle increases its stake to 65 percent and some investors may believe that the next step is a tender bid by Nestle for full control of the company,” Zach Herzog, head of international sales at Psagot Securities in Tel Aviv, said by phone. The price Nestle paid may be regarded as “a benchmark for public shareholders,” he said.
A spokeswoman for Osem, who asked not to be identified because of company policy, didn’t immediately respond to an e-mail seeking comment.
Nestle, based in Vevey, Switzerland, first acquired a stake in Osem in 1998, according to data compiled by Bloomberg. With the sale, Propper’s holding in the declines to less than 0.1 percent and he will stay on as chairman until the end of March 2016, Osem said in a filing to the Tel Aviv bourse yesterday.
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