ICL Gains to 16-Month High on Potash Sale Bets: Tel Aviv MoverShoshanna Solomon
Israel Chemicals Ltd. advanced to the highest level in more than a year amid speculation Benjamin Netanyahu will form a new governing coalition and approve the company’s sale to Potash Corp. of Saskatchewan Inc.
The shares gained 4.2 percent to 50.52 shekels, the highest level since September 2011, at the close in Tel Aviv. That values the company that extracts minerals from the Dead Sea to make potash and fertilizers at 64 billion shekels ($17.2 billion). The benchmark TA-25 Index rose 1 percent while Israel Corp., which holds a 52.3 percent stake in Israel Chemicals, advanced 4 percent to 2,659 shekels.
Finance Minister Yuval Steinitz said this month the proposed acquisition of Israel Chemicals was on hold until after yesterday’s election, in which voters gave Netanyahu the chance to serve a third term as prime minister. A takeover of the country’s second-largest company by market value would be at least three times bigger than the largest deal completed in Israel and would give Potash control of one of the few natural resources held by the Middle Eastern nation.
With Netanyahu staying in office “there is some chance that he may approve a sale of ICL to Potash Corp.,” Gilad Alper, a senior analyst at Excellence Nessuah said by phone. “The Labor party said very clearly it is against the sale.”
Canada’s Potash Corp. held talks in October with the Israeli government about increasing its stake from 13.84 percent. In December 2011, Israel Chemicals agreed to a doubling of royalties it pays on the natural resources it harvests.
Israel Chemicals trading volume was 1.7 times the three-month daily average, according to data compiled by Bloomberg. The company said this month it will supply 660,000 metric tons of potash to China in the first half of this year as part of a 3.3 million ton multi year contract.
Nine analysts recommend investors buy Israel Chemicals shares, eight say hold and one advises selling them, according to data compiled by Bloomberg.