Who gains what from the sale of Prolor?

The largest gainer is chairman Phillip Frost, who owns 20%, but several other executives have substantial stakes.

The Israeli biomed industry continues to flourish, and the latest deal whereby Prolor Biotech Inc. (AMEX: PBTH; TASE: PBTH) has been sold to US company Opko Health amply demonstrates this. Prolor, which at yesterday's close had a market cap of $370 million on the Amex exchange, will be sold to Opko at a valuation of $480 million in a share swap deal. Under the terms of the deal, each shareholder will receive 0.9951 shares in Opko for every Prolor share, making Prolor's share worth $7, a handsome premium of 20% on the latest market price.

The big winner from this deal is none other than Phillip Frost, chairman of Prolor, and mainly known for being chairman of Teva and the largest private shareholder in the Israeli generics giant. Through Frost Gamma Investments Trust, Frost (75) holds 20.2% of Prolor, and, under the current deal, will receive shares in Opko worth $88.2 million.

Frost, and the other Prolor shareholders, will, as mentioned, receive the consideration for their shares in shares of Opko rather than in cash, so that the value of their holdings in the framework of the deal is still only on paper.

The next in line is Prolor director Dr. Jane Hsiao, who has a 4.2% stake worth $16 million. Hsiao was formerly a senior manager at Ivax, Frost's generic drugs company bought by Teva seven years ago. And, apparently not coincidentally, Dr. Hsiao is also vice chairman and CTO at Opko, the acquiring company.

The two next largest gainers are Prolor's two most senior salaried managers: Shai Novik, president of the company, and Abraham (Avri) Havron. Novik (46), who has been the company's main representative to the press and media, has been in his post for six years. His gain (again, on paper) arises from options given to him over his years at the company, largely at exercise prices of almost zero. "Globes" found that the net value of Novik's options (after deducting the exercise price and according to the value of the acquisition deal) is $11 million (NIS 40 million). Novik's salary cost in the past three years has been about $1 million, so the gross amount before tax that he has earned from the company is about NIS 45 million.

For two years before he came to Prolor, Novik managed an investment company that he owned, and before that he was for two years CEO of A Online, which used to operate a financial website.

Havron emerges from the deal with a similar gain. Dr. Havron (64) has been CEO of the company for eight years. He holds a doctorate in bio-organic chemistry, and has 25 years experience in the biotechnology industry. Among other things, Dr. Havron was among the founders of InterPharm (now part of Serono), developer of Rebif for treating multiple sclerosis. The value of his stake in Prolor is $10.9 million (NIS 40 million).

Last in the list of Prolor shareholders is Professor Fuad Fares (56), the company's Chief Scientific Officer, and one of its founders. Fares is a biologist and pharmacologist. Among other things, he is a professor at the University of Haifa, and a member of the Council for Higher Education. The value of his stake in Prolor is $8.2 million (NIS 30 million).

Published by Globes [online], Israel business news - www.globes-online.com - on April 24, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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