The board of Biocell Ltd. (TASE: BCEL) decided not to sell the company's 17% stake in Protalix Biotherapeutics Inc. (AMEX:PLX; TASE: PLX) "in the best interests of the company and its shareholders."
Biocell's board of directors had considered various measures, including liquidation of the company and the distribution of its Protalix shares as a dividend in kind. Shareholders have been pressing the company to either liquidate or change its conduct. The Protalix holding is the company's sole interest, and investors say that they should own Protalix directly, and that there is no justification for the salaries of Biocell's managers and directors.
Biocell's directors rejected the shareholders' arguments. The directors' argue that liquidating the company would severely affect the value of its holdings, because Protalix's potential value is partly based on future improvements.
The directors also fear that shareholders could lose all sense of reason in buy or sell transactions in Biocell's shares during the liquidation process or distribution of a dividend in kind, which could take some time, rendering the Protalix stake illiquid in the meantime. This could affect Biocell's leading position in its market and ability to invest in the new medical ventures needed to expand its business.
Biocell's share price fell 1.3% by early afternoon to NIS 29.44, giving a market cap of NIS 185 million. Protalix's share price fell 0.9% on the American Stock Exchange on Friday to $6.79, giving a market cap of $581 million, and fell 3% on the TASE today to NIS 23.25.
Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2011
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