Oct. 28 (Bloomberg) -- El Al Israel Airlines Ltd. surged to the highest level in almost five months on speculation new investors are interested in taking over the company after Fimi Opportunity Funds backed out of plans to buy a stake earlier this month.
Shares of the carrier that posted losses in four of the last five years advanced 5 percent to 0.606 shekel, the highest level since June 5, at the close in Tel Aviv. Some 3.6 million shares were traded, equal to almost six times the three-month daily average. The benchmark TA-25 Index slid 0.6 percent.
The Lod, Israel-based carrier’s stock has advanced 10.4 percent since Chief Executive Officer Eliezer Shkedi was cited by Globes newspaper on Oct. 23 as saying “serious” local and foreign groups were interested in investing in the company. Shkedi made the comments at a ceremony inaugurating new aircraft, an airline spokeswoman confirmed by phone today.
“El Al is trading higher due to renewed takeover speculation in the market after last week’s press report,” Zach Herzog, head of international sales at Psagot Securities in Tel Aviv, said today by phone.
Fimi backed out of an investment of as much as $75 million in the country’s flagship carrier after terms of the agreement weren’t met, El Al said earlier this month. The airline is struggling to boost profitability amid increasing competition, saying in February it would cut 200 temporary jobs to trim costs.
A Transportation Ministry panel last month rejected almost requests by domestic carriers’ requests for regulatory relief when an Open Skies agreement with the European Union comes into effect in 2014.
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