Written by: Aaron Katsman | March 31, 2008
Aaron Katsman
www.IsraelNewsletter.com
Today’s news that Gilat Satellite Networks (GILT) is going to be acquired for $11.40 a share, should come as no surprise to IOI readers. We hate to brag, but we called this one a while back. This continues the IOI trend of predicting M&A, as we called the ECI Telecom deal as well. Maybe it’s time that you subscribe to our premium product( Subtle huh).
The price is about a 10% premium to Friday’s closing price.
The investor group includes Mivtach Shamir, The Gores Group LLC, DGB Investments Inc. and companies affiliated with Roy Ben-Yami, Ami Lustig and Eytan Stibbe.
While I thought that the company should remain independent and continue to grow, for the company and large investors, the deal was too good to pass up.
For merger arbitrage investors, keep your eye on how Gilat trades over the next few months. With the deal set to be completed in September, any weakness in the stock could make for an interesting play. After all a potential 6-10% return in 5 months, is nothing to sneeze at, especially in markets that can’t seem to go up.
Disclosure: Author’s fund holds a position in GILT. He holds no position in any other stock mentioned as of 3/31/08.
Please see our Disclaimer HERE.
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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.
Written by: Zack Miller | September 10, 2007
It’s a holiday-shortened week, so let’s jump right in.
On a macro front, it’s interesting to read that the G-30, an international group established in 1978 and composed of very senior representatives of private, public and academic circles, will be holding their 2008 plenary in Israel. Israel’s own Bank of Israel Governor, Stanley Fischer, will be hosting the group as part of Israel’s 60th anniversary celebrations.
Interesting interview of BigBand Network’s (BBND) CEO, Amir Bassan-Eshkenazi, and how he’s positioning the company to take on Cisco (CSCO). Read last week’s coverage of BigBand and why their positioning in the CMTS market may mean great things as they help determine the future of video delivery.
Google Israel (GOOG) is at it again. Now, they’re expanding into an additional 60m on the 21st floor of the Levinstein Building in Tel Aviv. Read about what IsraelNewsletter thinks is going on at Google Israel here.
Teva (TEVA) gets OK to sell generic version of Protonix. Although the Israeli generic powerhouse won the right to sell a version of Wyeth’s (WYE) Protonix, it may choose to hold off doing so until a full decision comes this Wednesday.
The Butler Group out with a new report saying that many medium- to large-sized ISVs (Independent Software Vendors) would benefit by leveraging Ness Technologies’ (NSTC) Managed Labs Offshore Delivery Model. Working with Ness allows ISVs to continue to beef up and speed up R&D while keeping costs manageable, said Butler. Read the whole report here. Check out IsraelNewsletter’s 4 Reasons to Go Long Ness Technologies as well.
TheStreet.com tries to decipher what’s going on at Medis Technologies (MDTL) through their options action.
Read IsraelNewsletter’s coverage of Blue Square-Israel’s (BSI) new foray into organic and health food.
In spite (because of??) all the M&A hullabaloo regarding ECI’s (ECIL) takeover by the Swarth Group, ECI wins a nice deal with India’s Bharti Airtel. Read what IsraelNewsletter has had to say about the impending ECI deal.
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Written by: Zack Miller | August 8, 2007
It’s been interesting to watch what’s been going with ECI Telecom (ECIL). As we wrote recently, ECIL, a leading telecommunications equipment manufacturer, has received a bid on the company by the Swarth Group & Ashmore Management consortium, headed by Shaul Shani at $10 per share.
Long story short: the stock stayed propped up near the $10 mark while news of a second bid emerged and then evaporated. As the deadline for counter-bids came and went, the stock traded down to 9.13 only to see it trade up to today’s level or so of 9.34, still an almost 7% discount off of Swarth’s bid of $10.
Why the discount you ask?
Well, I’d posit two reasons:
Transaction Risk: In his research note, Jefferies analyst George Notter pointed to a lack of detail around Swarth’s debt financing plan for the transaction. “Given macro concerns on the debt/LBO environment,” he writes, “it’s possible there may be some risk to Swarth’s anticipated debt financing plan for acquiring ECI. Credit markets are shot: Read Barry Ritholtz’s recent article for a flavor of the pain and see Phil Davis’ article on why the brokers are the new homebuilders.
Repricing Risk: It may be entirely possible that the deal gets repriced. If Shaul Shani’s Swarth Group is having trouble pulling the pieces together and in “light” of the recent Light Reading article explaining that no less than 11 firms have already passed on acquiring ECIL, it’s foreseeable that the deal gets done, just at a lower price.
That’s the leverage I’d be using if I were Swarth.
Disclosure: Author’s fund is long ECIL as of 8/8/07
Please see our Disclaimer HERE.
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Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC. and a former equity analyst for a leading multinational hedge fund. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email zack@profile-financial.com
Written by: Aaron Katsman | July 30, 2007
By Aaron Katsman
IsraelNewsletter.com
ECI Telecom (ECIL), a leading telecommunications equipment manufacturer, has another 24 hours to find another buyer with a better offer or else be acquired by the Swarth Group & Ashmore Management consortium, headed by Shaul Shani. Either the company is keeping its cards close to the vest, or no buyer has emerged. If an alternative buyer isn’t found then Swarth & Ashmore will purchase ECI at $10 per share.
When news of a potential alternative buyer surfaced the stock jumped a bit, but it sure seems that the market doesn’t believe they will succeed in finding another purchaser. That being said, getting sucked into the global selloff of last week, ECI stock is trading in the $9.35 range, about $0.50 less than it was trading just two weeks ago. Either the market doesn’t believe the Swarth deal is going to go through either, or there is a nice trade that would yield over 6.5% net until the deal closes. The company announced an extraordinary general meeting of shareholders for August 29, where, among other issues, a vote on the merger will take place. I haven’t heard any information to indicate the acquisition won’t be approved. In fact after speaking with some merger arbitrage hedge funds who see this opportunity, this seems like a “no brainer.”
I think that the market is mispricing ECI currently, and if you are looking for an interesting bet until the end of the year, this is a good opportunity.
Please see our Disclaimer HERE.
Disclosure: Author’s fund is long ECIL as of 7/30/07.
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Aaron Katsman is the 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.
