Clal Biotechnology Industries Ltd. (TASE: CBI) will record a profit of NIS 250 million in the third quarter as a result of the change in the method of listing the balance of CureTech Ltd. shares that it owns, the company reported to the TASE this morning.
This follows the deal between Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and CureTech and its shareholders, which includes Clal Biotech. The company turned to the Israel Securities Authority in a preliminary appeal over the equity method used in its investment in CureTech. In the appeal, the company presented its stance, which is that since completion of the deal, the company has had no significant influence in CureTech and that from that day, the investment in CureTech will be listed as a "financial asset shown at fair value through profit and loss".
Yesterday, the Securities Authority told Clal Biotech that it will not intervene in the company's stance. Therefore, as of the time of completion of the deal, the remaining investment in CureTech will be considered on the basis of fair value at the time of the completion of the deal ($72 million) based on the value assessment draft the company received from an independent outside apraiser.
The company will list a profit of NIS 250 million in the third quarter of 2011 in its profit and loss report. This profit will be considered as the difference between the fair value of the company's investment in CureTech and the value listed in the report for the company in CureTech on the day before the deal is completed (including changes in the value of options given to Teva).
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2011
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