Adama to cancel NY offering

Chen Lichtenstein

Demand from US institutions has been low at the offering price that Adama seeks.

The offering by Israeli crop protection provider Adama Holding Ltd. (TASE:ADMA.B1) (formerly Makhteshim-Agan), headed by CEO Chen Lichtenstein, on Wall Street will be cancelled, because of low demand on the part of US investors at the offering price that the company sought ($16-18), even though Israeli investment institutions registered interest.

Although Adama embarked on an offering, its controlling shareholder, ChemChina, has no interest in completing it at any price, and so it will be made only if the company obtains the valuation that its board of directors determines is appropriate.

Adama managers have been conducting meetings with US investment institutions for over a week, with the aim of floating the company on the New York Stock Exchange (NYSE) under the ticker ADAM.

Adama planned to issue 23.5 million shares at a price of $16-18 per share, and thus raise $376-423 million, at a valuation of $2.6-2.9 billion after money. The underwriters were granted an option to purchase up to 3.525 million additional shares from the company, which would have increased the size of the issue by about $60 million, and the company's value accordingly.

On the Tel Aviv Stock Exchange, fast-moving speculators have already sent the share price of Discount Investment, a significant shareholder in Adama, down by about 9%.

Published by Globes [online], Israel business news - - on November 20, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

Chen Lichtenstein
Chen Lichtenstein
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