Caesarstone Drops Most Since September as CEO Shiran Resigns

  • Kibbutz that owns 33% stake led failed proxy fight in November
  • Caesarstone shares have plunged 50% from peak in July 2015

Caesarstone Sdot-Yam Ltd., the maker of quartz countertops that was founded on a kibbutz, fell the most in eight months after Yos Shiran resigned as chief executive officer.

Shiran, who joined in 2008, is leaving “to pursue other interests” and will remain CEO as Caesarstone searches for his replacement, according to a company statement. Shares plunged 13 percent to $34.97 in New York, the biggest drop since September 2015, on more than 5 times the average daily trading volume of the past three months.

Shares of Caesarstone, whose 2012 initial public offering is the best performing IPO out of Israel in nearly two decades, have lost about half their market value from a record high in July after the company trimmed its 2015 revenue forecast on weaker-than-estimated growth in the U.S., considered the heart of its expansion plan. Last year, short sellers seized on discord between Shiran and the kibbutz members who sit on the board of the 28-year-old company as a reason to be bearish on the stock.

Shiran’s departure does not reflect any issues or concerns with the “underlying fundamental positioning or prospects of the company,” JPMorgan analyst Michael Rehaut said in a research note reiterating a buy rating on the stock. The move is “more driven by personal reasons, in our view, after seven plus years as CEO and guiding the company through a relatively tumultuous period over the last 18 months,” Rehaut said.

Analysts at UBS AG also affirmed a buy rating on Caesarstone, citing their forecast that the company remains on track to grow in the U.S. this year.

In November, members of Kibbutz Sdot-Yam Ltd., which owns 33 percent of Caesarstone, started an unsuccessful proxy fight to replace two members of the board with their own candidates.

Shiran, reached by phone, declined to comment on whether strife with the kibbutz played a role in his decision to leave the company.

Caesarstone shares rallied last month on speculation that private equity firms were considering buying the kibbutz members’ stake in the company.

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