The share price of Aeronautics Ltd. (TASE:ARCS) shot up 23% today on a huge turnover during trading on the Tel Aviv Stock Exchange (TASE), after The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) sold its entire holding in the company last Thursday at NIS 8.50 per share, 25% higher than Thursday's closing price. The deal totaled NIS 25 million.
Aeronautics develops and manufactures unmanned aerial vehicles (UAVs), observation balloons, bomb fuses, and advanced navigation systems. The controlling shareholder in Aeronautics are the KCPS, Bereshit, and Viola funds. Other important shareholders following the deal include Menorah Mivtachim Holdings Ltd. (TASE: MORA) (9.4% and Bank Leumi (TASE: LUMI) (5.3%) the only investment institutions with substantial holdings in Aeronautics besides these three funds.
Aeronautics's business was hit hard in the past year, following an affair in a foreign country, following which the Ministry of Defense suspended its license to market and exports its UAVs to an important customer in that country (a gag order is still in effect regarding this affair after a criminal investigation was begun a year ago).
Four months ago, Aeronautics reported to the TASE that 10 of its executives, including CEO Amos Matan, would be tried, subject to a hearing to be conducted in the economic department of the State Attorney's Office. The indictment against Aeronautics personnel charges executives and senior employees with aggravated fraud and offenses under the Defense Export Control Law committed under aggravating circumstances.
Aeronautics became a public company in the summer of 2017, after the funds with a controlling interest in the company held an offer for sale for over NIS 400 million. The company also issued new shares amounting to NIS 53 million to Leumi Partners, which led the offering, and trading began in the Aeronautics's shares at a company value of over NIS 1 billion. The share has since lost over half of its value, putting the company's market cap down to NIS 450 million.
Rafael Advanced Defense Systems Ltd. and financier Avichai Stolero submitted a joint bid to acquire Aeronautics for NIS 430 million and turn it into a private company in August. Aeronautics's board of directors rejected the offer.
Published by Globes, Israel business news - en.globes.co.il - on December 30, 2018
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