Israel Chemicals Ltd. (ICL) dropped the most in six months after Finance Minister Yair Lapid said he will adamantly oppose Potash Corp. of Saskatchewan Inc.’s potential bid for the chemicals maker.
Shares of the company that extracts minerals from the Dead Sea to make fertilizers and potash dropped 3.9 percent, the most since Oct. 9, to 46 shekels at the close in Tel Aviv as volume doubled the three-month daily average. Controlling shareholder Israel Corp. lost 5.9 percent, the most since 2011, to 2,483 shekels. The TA-25 Index rose 0.2 percent.
Optimism that a deal would materialize helped boost Israel Chemical’s stock 5.3 percent in the three months ending March 31. Lapid will “adamantly oppose” the agreement and plans to set up a panel to rethink the state’s rights in natural resources managed by private companies, according to an e-mailed statement today. The resources are a “public asset”, he said.
“This could be the final nail in the coffin for the deal,” Richard Gussow, an analyst at DS Securities & Investments Ltd. in Tel Aviv, said today by phone. “This is bad news for the stock price of both ICL and the Israel Corp.”
The proposed acquisition of ICL, Israel’s second-largest publicly traded company by market value, would create the world’s biggest producer of potash, a nutrient that helps crops withstand drought and strengthens plant root systems. It would also be the biggest Middle Eastern takeover, according to data compiled by Bloomberg.
Lapid, head of Israel’s second-biggest political party, Yesh Atid, had criticized the transaction for its potential to harm Israel’s southern Negev region before becoming finance minister in March. ICL employees have protested against the deal.
Earlier in the day, ICL Chief Executive Officer Stefan Borgas said the company would benefit from the deal. “Merging ICL with a big, strong global partner is a good idea,” he said today in a Bloomberg Television interview in the Tel-Aviv Stock Exchange.
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