Delek Group Drops Before $23 Million Share Sale: Tel Aviv Mover

Delek Group Ltd. dropped the most in almost two weeks as the holding company with stakes in the country’s two biggest natural gas fields plans to offer 83.7 million ($23.47 million) of new shares.

Shares of Delek Group, whose interests include the off-shore Leviathan and Tamar sites, dropped 1.6 percent, the most since April 24, to 948 shekels at the close in Tel Aviv. Volume rose to 2.4 times the stock’s three-month daily average and it was the second-largest decliner on a percentage basis on the TA-25 Index, which gained 0.6 percent.

Delek filed the shelf offering today. The company will sell shares at a minimum price of 936 shekels each at the market close today, Leader Capital Markets Ltd., one of the underwriters, said in an e-mailed report. The shares closed at 963.2 shekels yesterday.

“The shares are down because investors are selling on expectation to buy them at a lower price in the tender,” Sharon Naveh, head of institutional and international sales at Migdal Capital Markets Ltd. in Tel Aviv, said today by phone.

Prior to the offering, there were 11.4 million shares outstanding with 4 million in free float, according to data compiled by Bloomberg. The shares represent 2.33 percent of the benchmark gauge, the 14th-heaviest weighting, the data show. The benchmark index is a capitalization-weighted index of 25 stocks traded on the Tel-Aviv Stock Exchange

“The offering will allow Delek to increase its free float to above 35 percent and consequently increase its weighting on the main index,” Roni Biron an analyst at UBS Securities Israel Ltd. said today by phone. The added weight “will increase the amount of passive investments from index funds.”

Delek Group shares have advanced 8.7 percent this year, after climbing 22 percent in 2012, in anticipation of the March 30 start of gas flow from the Tamar field, in which the company owns stakes via Delek Drilling-LP and Avner Oil Exploration LLP.