Bloomberg News

Gazit Sells Shares on NYSE as RadVision Jumps: Israel Overnight

December 14, 2011

Dec. 14 (Bloomberg) -- Gazit-Globe Ltd., the Tel Aviv-based real-estate investor with properties from San Francisco to Sao Paulo, raised less than planned in the first Israeli share sale on the New York Stock Exchange in four years, selling $81 million of stock.

The company sold 9 million shares at $9 and will join 14 Israeli companies that trade on the bourse. The Israel-traded shares declined 2 percent to 35.20 shekels, or the equivalent of $9.25, at the 4:30 p.m. close in Tel Aviv. The stock has tumbled 13 percent since Gazit-Globe announced the plans on Dec. 5. The company initially sought to raise as much as $111 million. Israel benchmark index, the TA-25, lost 0.2 percent.

Gazit-Globe “wants exposure to foreign investors who don’t want to deal with the bureaucracy of investing through an Israeli brokerage,” said Amir Arad, an analyst at Excellence Nessuah Investment House Ltd. in Ramat Gan, Israel. “It’s an initial foothold for the company that has most of its assets overseas.”

The Bloomberg Israel-US 25 Index of the largest New York- traded Israeli companies fell yesterday for the first time in three days, led by a drop in SodaStream International Ltd. The index erased gains of as much as 2.1 percent, tracking U.S. stocks lower after the Federal Reserve refrained from taking additional actions to stimulate the economy, saying the U.S. is maintaining growth even as the global expansion slows.

Gazit will join Israeli companies on the NYSE including Cellcom Israel Ltd., the country’s largest mobile-phone provider, which sold shares in February 2007. SodaStream, the Israeli maker of machines that carbonate tap water, first sold shares on the Nasdaq Stock Market in November 2010. Israel, whose population of 7.7 million is similar in size to Switzerland’s, has about 60 companies traded on the Nasdaq, the most of any country outside the U.S. after China.

‘Successful’

Tel Aviv Stock Exchange Chief Executive Officer Ester Levanon said that more listings of Israeli companies on bourses in New York will help performance of the local stocks.

“If we have these companies trading in more places, it will be successful for us as well,” Levanon said in an interview in New York last month. “We want a better representation of the Israeli economy.”

Gazit-Globe hired Citigroup Inc., Deutsche Bank AG and Barclays Plc to arrange the offering. The shopping-center developer has about 660 properties in more than 20 countries, which had a value of $18.5 billion as of the end of the third quarter, according to the filing announcing the share sale.

The company reported Nov. 21 that third-quarter net income fell to 169 million shekels ($44.5 million) from 197 million shekels a year earlier.

Share Swaps

“For Gazit, the target of this offering isn’t to raise money as much as it’s to have its shares traded on the NYSE,” said Shay Lipman, an analyst at IBI-Israel Brokerage and Investments Ltd. in Tel Aviv. “It will give the company the opportunity to do mergers and acquisitions using share swaps.”

The shares are down 22 percent this year, headed for their first annual decline since 2008 and underperforming the TA-25 Index. Concern among investors that Europe’s debt crisis will curb demand for Israeli exports has pushed the TA-25 and the Bloomberg Israel-US 25 Index down 19 percent this year.

RadVision Ltd. jumped to the highest level in six months in U.S. trading after daily newspapers TheMarker and Globes reported on their websites that Avaya Inc. is in talks to buy the Israeli maker of video-conferencing systems.

The Tel Aviv shares climbed 18 percent to 37.01 shekels, or the equivalent of $9.72 today.

Avaya Purchase

Avaya, a phone-equipment maker owned by private-equity firms Silver Lake and TPG Capital, is close to buying RadVision for $300 million, or $16.17 a share, a 95 percent premium to yesterday’s closing price in Israel, daily TheMarker reported, without saying how it obtained the information.

Globes said the company is in talks to be bought for $200 million, without citing anyone.

Deb Kline, an Avaya spokeswoman, declined to comment on the reports when contacted by Bloomberg News. Messages left at RadVision’s headquarters in Tel Aviv after the close of normal hours weren’t immediately returned.

Perrigo Co., the largest U.S. maker of generic over-the- counter drugs, dropped 1.2 percent to $97.22 in the U.S. yesterday. The shares declined 3 percent to 363 shekels, or $95.35, in Tel Aviv today.

U.S. regulators blocked unrestricted access to generic copies of an emergency contraceptive, affirming a move last week requiring girls under age 17 to have a prescription for the brand-name drug.

Plan B

Health and Human Services Secretary Kathleen Sebelius ordered the Food and Drug Administration Dec. 7 to reject Teva Pharmaceutical Industries Ltd.’s request to sell its Plan B One- Step as the first over-the-counter emergency contraceptive to women of all ages. Sebelius’s intervention was the first time HHS overrode an FDA staff decision.

SodaStream declined 5.3 percent to $33.17, the biggest drop in three weeks.

EZchip Semiconductor Ltd., the Israeli maker of network processors, climbed 1.5 percent yesterday to $29.92, the biggest gain in nine days. The Tel Aviv shares added 2.1 percent to 114.7 shekels, or the equivalent of $30.13, today.

The company’s shares were raised to “buy” from “hold” at Auriga USA.

--Editors: Brendan Walsh, Glenn J. Kalinoski

To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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