Gazit Inc buys 12% of Ormat Industries
Haaretz
June 14, 2007
By Yoram Gavison
Aggressive buying by a foreign investment firm that operates in Israel spurred shares in Ormat Industries (TASE: ORMT) to a 12% gain on the Tel Aviv Stock Exchange, on enormous turnover of NIS 358 million. That's ten times its average daily volume of trade in the last three months. No less than 6.3% of the company's stock changed hands yesterday alone, and TheMarker has learned that the buyer is none other than Gazit Inc., which belongs to real estate developer Chaim Katzman.
In mid-morning Thursday, Gazit released an announcement confirming that it had bought 8,455,000 shares in Ormat Industries in and off the floor, for an average share price of NIS 47.91.
Gazit Inc now owns 14,255,000 shares in Ormat Industries, it declared, comprising 12.1% of the energy company's issued and paid-up share capital., and voting rights.
It began investing in Ormat during the first quarter of 2007, Gazit stated, and has so far invested a total of NIS 688 million in the company.
Traders had speculated that Gazit began buying on Wednesday morning, from Gmulot's provident funds and Migdal's profit-sharing insurance policies.
Gazit paid a substantial premium over Ormat Industries' Wednesday-opening share price.
"We are happy to announce that from today, Gazit Inc is an interested shareholder in Ormat," Katzman stated, adding that it had already owned a smaller stake in the company and has been watching it closely. "Once an opportunity arose, we took advantage of the conditions on the market and increased our holdings in the company. We believe in the company and in its management, and believe in the field of alternative energy."
Based on the speed of the action and the willingness to pay a premium over the share price, market sources had surmised that the buyer was an investment company wanting to obtain a substantial stake in the geothermal energy company. They were right.
Ormat actually engages in alternative ("green") energy of different types. Mainly it builds and operate geothermal and heat-recovery power stations.
In the United States, subsidiary Ormat Technologies has become one of the three biggest green-energy players.
Traders surmise that Gazit began the Wednesday session already owning nearly 5% of Ormat Industries' shares, and that it increased its stake to around 12%. In parallel Gazit also bought shares of Ormat Technologies on Wall Street.
Gazit is not believed to be planning a hostile takeover of Ormat, which is run by Yehudit and Lucien Bronicki. More probably Katzman wants representation on Ormat's board of directors.
The Bronicki's own 27.7% of Ormat Industries' shares. In turn Ormat Industries owns 64% of Ormat Technologies, which is traded on the New York Stock Exchange at a market cap of $1.4 billion.
Shares in Ormat Technologies shot up 7% on Wall Street last night.
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