After sporting a strong earnings report, NDS Group (NNDS) announced that they have raised their offer to take the company private. According to Business Wire: ” … that the independent committee of its board of directors has reached an agreement in principle with News Corporation and two subsidiaries of funds advised by Permira Advisers LLP on a price at which News Corporation and the Permira entities would acquire all issued and outstanding NDS Series A ordinary shares, including those represented by American Depositary Shares traded on NASDAQ, for per share consideration of $63 in cash. The consummation of the transaction would result in NDS ceasing to be a public company, and the Permira entities and News Corporation owning approximately 51% and 49% of NDS, respectively.”

The deal is subject to approval from a host of regulators, shareholders, etc. Initially the deal was to be at $60/share, but with the company producing strong results, they received and opinion from Citigroup Capital Markets (C) who recommended $63 as a fair price.

We wrote back in July how we thought this may be a new trend, taking public companies private. Check out that post, here. The difference in the NDS case is that they are a company who continue to produce stellar results and whose share price has held up, not dropped by 80% like other companies.

Disclosure: Author’s fund has a position in NNDS. He has no position in any other stock mentioned as of 8/05/08.

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NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

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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Rumors are swirling in the Israeli press that Ormat Technologies (ORA), a leader in geothermal energy, is about to close a large M&A. These rumors are based on an article in Power, Finance and Risk, which is reporting, ” Geothermal developer Ormat Technologies is on the hunt for strategic acquisitions and is working with Lehman Brothers to do so. The company has reportedly looked at a few targets but nothing has yet come to fruition.” The article continues, “Targets on the geothermal side are scant, but one Ormat is said to have chased is Salton Sea, an inland saline lake in Imperial Valley, Calif., with some 500-600 MW of geothermal potential.”

The rumors are that they will offer around $1.1 billion for the Salton Sea project, which will increase Ormat’s output by about 80%.

Funding the acquisition could be another problem. The company, as of 3/31/08,  had about $30.7 million in cash, and in May they sold 3.1 million shares for about $149.6 million. This means that they are going to have to take on a sizable amount of debt to complete an acquisition of this sort.

This move will help placate some large shareholders like Haim Katsman (no relation), who have been pushing for the company to get more aggressive in expanding.

I guess the question is whether taking on such large amounts of debt, is worth the expanded output? I guess only time will tell.

Disclosure: Author’s fund has a position in ORA, he has no position in any other stock mentioned as of 8/04/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

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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Rumors are swirling in the Israeli press, that the world’s largest generic drug maker is about to become much larger. Reports are that the Israeli based Teva Pharmaceuticals (TEVA) is in talks to buy US Generic maker Barr Pharmaceuticals (BRL) for as much as $7.5 billion, a 40% premium to their closing price yesterday. While Barr comes with a fat price tag, the deal would make sense for Teva, as Barr is very active in Central and Eastern Europe, geographies that Teva has been targeting at for future growth.

Teva has around $3 billion in the bank so it appears they are going  to have to go out and issue debt to fund the deal. The debt plus the big premium, may pressure the stock price in the short term, but over the long haul, this may prove to be another in a long line of very wise acquisitions.

The deal also brings some pride to the Israeli business community is this would be the biggest M&A in Israeli history. The fact that an Israeli company has the potential to do such a large acquisition is a testament to the ingenuity and steadfastness of the local economy.

Aaron Katsman, IsraelNewsletter.com

Disclosure: Author’s fund has a position in TEVA as of 7/17/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

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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Aaron Katsman
IsraelNewsletter.com

As we have mentioned here before, many Israeli companies have to look abroad for growth. In many sectors, especially banking, the big players have such a large market share, that growth prospects are dim. Hence the need to look outside Israel for new markets.

Globes is reporting that Bank Leumi is looking to make an acquisition in Latin America. According to the paper: ” Bank Leumi (TASE: LUMI) is expanding its global activity, amid the realization that it will have difficulty increasing its market share in Israel. The bank intends to expand its activity in Latin America and acquire a financial institution, bank or broker for around $100-150 million. Leumi’s preferred countries are Mexico, Chile and Brazil.”

While the Israeli banks have some small US operations and also have operations in London and Switzerland, I would look for them to expand into Latin America, Eastern Europe and at a later date, Sub-Saharan Africa, as these are markets that with tremendous potential. Israeli banks happen to be second to none with regard to the sophistication of product as well as technology- including internet banking.

These value added services would be put to use best in emerging markets where the banking system is less sophisticated.

Look for Israeli banks like Bank Leumi to continue exploring for international acquisitions.

Disclosure: Author’s fund has no position in any stock mentioned as of 7/03/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

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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