Mishorim Development Ltd. (TASE:MSHR) and Israel Land Development Company (TASE: ILDC) Canadian subsidiary Skyline International Development Inc. had only a partial success in its IPO on the Tel Aviv Stock Exchange (TASE) today. Demand in the institutional tender was just NIS 62 million, 40% of the amount the company had sought to raise. It will nonetheless list on the TASE without the underwriters, led by Poalim IBI Underwriting and Issuing Ltd., exercising their overallotment options.
Skyline's shares were offered to the institutions at effective company value, taking into account the value of the options in the package - C$170 million (NIS 540 million), before money. This is 40% higher than the company's shareholders' equity of C$120 million (NIS 380 million). It seems that the offering's relative failure was due to the aggressive pricing that Mishorim president Gil Blutrich, and the geographical remoteness of the company's business in Ontario.
In addition, some institutions were worried about the rate of progress of Skyline's flagship Port McNicoll project outside Toronto, where the company is due to build 1,000 housing units.
Skyline will hold the public tender of the offering next week, in which the final price will be set; probably little higher than the price in the institutional tender.
Skyline, a developer of resorts and residential projects in Ontario, is listing on the TASE, after over a decade in business. The IPO comes after it raised $40 million from Canadian institutional investors at a company value of C$180-220 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 26, 2014
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