Israel Corporation (TASE: ILCO) has sold NIS 395 million worth of Israel Chemicals Ltd. (TASE: ICL) shares. UBS AG (NYSE; SWX: UBS) distributed the shares, after buying them at a NIS 49.40, a 1% discount on yesterday's closing price of NIS 49.90.
Israel Corp.'s share rose 0.2% in early trading today to NIS 2,849, while Israel Chemicals' share fell 0.8% to NIS 49.50.
Israel Corp. notified the TASE that it sold 8 million Israel Chemicals shares, amounting to 0.63% of the company. Israel Corp. added that the sale increased its shareholders' equity by $85 million.
UBS's distribution of the Israel Chemicals shares stands out given the failure in Deutsche Bank AG's (NYSE: DB; XETRA: DTEG) distribution of Israel Discount Bank (TASE: DSCT) shares last week. Deutsche Bank bought 5% of Discount Bank from MI Holdings (State of Israel Properties), but was unable to sell all the shares at a profit, and therefore forewent an option to buy an additional 3.33% of Discount Bank. Market sources estimate that Deutsche Bank lost about $1 million on the deal.
However, market sources told "Globes" that UBS had no problem unloading the Israel Chemicals' shares.
Israel Corp. owned 53% of Israel Chemicals before the sale, and will remain Israel Chemicals' controlling shareholder following the sale.
Market sources believe that Israel Corp. sold the shares in order to beef up its cash reserves to counter losses by wholly-owned subsidiary Zim Integrated Shipping Services Ltd.
Published by Globes [online], Israel business news - www.globes-online.com - on January 26, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010