Two dual-listed shares announced last week that they are delisting from the Tel Aviv Stock Exchange (TASE): VeriFone Holdings Inc. (NYSE: PAY; TASE: PAY) and Metalink Ltd. (Nasdaq: MTLKD;TASE: MTLK). The positions of the two companies are utterly different: Metalink has a negligible market cap of $4.5 million, while VeriFone has a market cap of $1.95 billion, and would have probably entered the Tel Aviv 25 Index at the upcoming update in June following a six-fold rise in its share price over the past year.
Metalink, which sold its main business to Germany's Lantiq earlier this year for $16.9 million, announced that it will delist on the TASE after almost a decade on the exchange. The company began trading on the TASE in December 2000, and has lost nearly 100% of its value during this period. The company will continue to be traded on Nasdaq.
VeriFone, like pharmaceutical company Perrigo Company (Nasdaq:PRGO; TASE:PRGO), joined the TASE through the acquisition of an Israeli company; Perrigo acquired Agis Industries Ltd., while VeriFone acquired Lipman Electronics Engineering Ltd., whose shares were dual-listed on the TASE and Nasdaq, in late 2006. The acquisition contract stipulated that VeriFone's stock would continue to be traded on both Nasdaq and the TASE for two years.
Last month, VeriFone, a developer of credit card clearing solutions, closed its Israeli manufacturing activity, which it owned back in the time of Lipman, and outsourced the business. The company currently has 573 employees in Israel. VeriFone Israel president Lazy Yanay, a former VP at Lipman, said that the delisting of the share from the TASE and the closing of manufacturing in Israel did not mean that the company was scaling back its activity in the country.
"Verifone has 20% of its workforce in Israel," said Yanay. "There is accumulated know-how here in the field of electronic payments from the Lipman era, and we're now setting up an international R&D center of Gazit POS in Israel at a cost of millions of dollars, and hiring more development staff." Verifone acquired Gazit POS, a developer of store and chain management solutions, 18 months ago.
Commenting on the delisting, Yanay said, "The share price is set on Nasdaq, not here. Trading in Israel accounts for just a few percent. This is an unnecessary expense that does not create value for either small or large shareholders."
Verifone's share closed at $23.06 on Nasdaq on Friday. The share rose 0.2% by mid-afternoon on the TASE today to NIS 85.50. Metalink's share closed at $1.75 on Nasdaq on Friday. The share fell 6.6% by mid-afternoon on the TASE today to NIS 6.11.
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2010
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