Aaron Katsman
www.IsraelNewsletter.com
IOI has mentionednumerous times about the intriguing potential buying opportunity presented in Comverse Technology (CMVT.pk). The huge cash position along with large positions in publicly traded Verint Systems (VRNT.pk) - the jewel of the group- and Ulticom (ULCM.pk), have made Comverse one of our favorite Israeli plays. We have mentionedthat we thought the the company will sell-off their holdings and it appears that this strategy is starting to take place.
Yesterday, the Israeli financial daily Globes reported that Ulticom has retained investment bank Jefferies and Co. to review strategic alternatives. The article also quoted Comverse president and CEO Andre Dahan, “This is the first stage of my strategy. Businesses that are not synergetic with our business can be sold. Although we emphasized in the announcement that there is no deal yet, and that Ulticom’s board might not approve any deal, but this is definitely a step towards the sale of the company.”
Previously we have mentioned that a potential breakup value of Comverse could be worth around the $30 level. Investorslooking for an interesting value play, may want to take a long look at Comverse as it appears that the breakup strategy is about to begin.
Disclosure: Author’s fund has a position in CMVT.pk,VRNT.pk and ULCM.pk, fund has no position in any other stock mentioned as of 4/18/08.
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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
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