Fundtech Offers Biggest New York Premium on S1: Israel Overnight
Fundtech Ltd. (FNDT), the Israeli provider of banking software for Bank of America Corp. (BAC) and HSBC Holdings Plc, posted a smaller decline in New York than in Tel Aviv as lawyers began investigating a buyout offer of S1 Corp.
Fundtech retreated 1.9 percent to $18.79 by 5:19 p.m. in New York yesterday, after the Israeli-traded stock fell 6.7 percent to 60.40 shekels, or the equivalent of $17.81. Fundtech shares in the U.S. traded at a 98-cent premium to the Tel Aviv shares, the biggest difference among the largest Israeli companies that are dually traded, according to data compiled by Bloomberg. The shares climbed 5.4 percent to 63.65 shekels, or the equivalent of $18.68, at the 4:30 p.m. close in Tel Aviv.
Levi & Korsinsky, a law firm with offices in New York, Washington and California, said yesterday it is investigating the board of Norcross, Georgia-based S1 for possible breaches of fiduciary duty after ACI Worldwide Inc. (ACIW) proposed to acquire the technology company. ACI’s offer came a month after Fundtech, based in Herzliya, Israel, said it agreed to be bought by S1 in a transaction valued at about $700 million.
“ACI is coming at the 11th hour to spoil Fundtech’s plans,” said John Kraft, an analyst at DA Davidson & Co. in Great Falls, Montana. “Now they’re going to be competitors instead of being partners.”
Fundtech said it’s aware of ACI’s acquisition offer and that while it executed a definitive merger agreement with S1, “there can be no assurances that the closing conditions will be satisfied,” according to a Globe Newswire statement late yesterday.
S1 said in a statement after the close of trading in New York that it continues to be bound by the terms of the merger agreement with Fundtech, and its board will review the terms of the proposal submitted by ACI.
Calls made to Joseph Levi, a partner at the law firm, seeking further comment on the investigation weren’t returned. Levi & Korsinsky, in a statement, said holders of S1 common stock could join the action.
S1 shares surged 30 percent to $9.26 yesterday, the biggest increase in 11 years.
The Bloomberg Israel-US 25 Index of the largest Israeli companies traded in New York fell to the lowest level in three weeks yesterday, dropping 0.5 percent to 99.67.
The U.S.-traded shares of Fundtech soared 17 percent on June 14 after the company announced that a multinational corporation had expressed interest in acquiring it. The stock rose 59 percent over the past 12 months, the seventh best- performer on the Bloomberg Israel-US 25 Index.
The difference between the offer price for Fundtech and S1 shares in the original transaction widened to $7.38, the highest level since the deal with S1 was announced on June 27. The spread was at 33 cents on July 25.
ACI proposed to acquire S1 Corp. (SONE) for $9.50 a share, or 33 percent above the stock’s closing price on July 25, according to a Globe Newswire statement yesterday.
“We are confident S1 shareholders will share our strong belief that ACI’s premium proposal is superior to and provides S1 shareholders with significantly greater value than the pending transaction with Fundtech,” Philip Heasley, the chief executive officer of ACI, said in a statement yesterday.
Fundtech fell as much as 7.6 percent in New York trading yesterday before recovering most of its losses.
Israel, whose population of 7.7 million is similar to Switzerland’s, has 57 companies traded on the Nasdaq, the most of any country outside the U.S. after China. It is also home to the largest number of startup companies per capita in the world.
Israeli technology companies raised $569 million in capital during the second quarter of 2011, the most in two years and up from $343 million in the same period last year, according to the Israel Venture Capital-KPMG Quarterly Survey released July 13.
Israel’s stock market was upgraded to developed market status by MSCI Inc. in May 2010, the same month the 63-year-old country was accepted to the Organization for Economic Cooperation and Development.
Israel gave initial approval to a 1 billion-shekel ($295 million) grant to Intel Corp. (INTC), which is planning a $5 billion investment in two facilities in the country, the Finance Ministry said in e-mailed statement yesterday.
Bank of Israel Governor Stanley Fischer left the benchmark interest rate unchanged at 3.25 percent on July 25 as inflation expectations fell and debt crises in the country’s two main export markets, the U.S. and Europe, threatened economic growth.
The shekel weakened 0.5 percent to 3.4071 per U.S. dollar. The currency has increased 0.2 percent over the past three months, the second-best performer among 10 emerging markets in Europe, Middle East and Africa tracked by Bloomberg.
Israel’s TA-25 Index dropped 0.6 percent. The measure has lost 5.4 percent this year, or 1.6 percent in dollar terms, data compiled by Bloomberg show. The Bloomberg Israel-US 25 Index is down 3.8 percent this year.
Radware Ltd. (RDWR), the Israeli company whose technology helps Internet networks run more efficiently, led gains on the Bloomberg Israel-US 25 Index, rising 5.9 percent to $34.51. The company reported second-quarter adjusted earnings of 32 cents per share, above the 29 cents median estimate of four analysts surveyed by Bloomberg.
Teva Pharmaceutical Industries Ltd. (TEVA), the world’s worst- performing health-care company this year, fell for a third day, dropping 0.4 percent to $46.79. Tel Aviv-traded shares gained 0.6 percent to 160.70 shekels, or the equivalent of $47.15. Second-quarter profit was little changed as higher European sales after last year’s acquisition of Ratiopharm GmbH offset declining revenue in the U.S.
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