Discount Jumps Most Since 2012 on Adama Stake Sale to ChemChina

  • Chinese to complete takeover in deal worth $1.4 billion
  • Debt-ridden IDB expects $178 million profit from sale

Discount Investment Corp. saw the biggest gain in almost four years after entering into an accord to sell its remaining stake in Adama Agricultural Solutions Ltd., the world’s largest maker of generic agro-chemicals, to China National Chemical Corp.

Shares in Discount leaped 23 percent to 10.90 shekels at the close in Tel Aviv in 25 times the 3-month average daily volume. The yield on the company’s 4.95 percent bonds maturing December 2025 dropped 117 basis points to 6.09 percent, the lowest level since November 2014.

China National, known as ChemChina, will pay Discount, owned by debt-ridden IDB Development Corp., $230 million for its 40 percent holding in Adama and will forgive a $1.17 billion loan, the company said in a statement. The Beijing-based manufacturer bought a controlling stake in 2011.

IDB, controlled by Argentine businessman Eduardo Elsztain, needs to raise funds for the company’s operations and has been seeking the sale of assets. Discount said it expects to post a 690 million shekel ($178 million) profit from the sale to ChemChina. The regulator is now demanding the company divest the controlling stake in its Clal Insurance Enterprises Holdings Ltd. unit via the Tel Aviv bourse after several attempts to sell Clal fell through.

The yield on IDB’s 4.95 percent debt due December 2025 slumped 189 basis points to 11 percent, the lowest level since January 2015.

(An earlier version corrected the currency in second deck headline.)
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