After having its offering put into the deep freeze because of a dispute with its employees, the Tel Aviv Stock Exchange (TASE) is now going ahead with listing its own shares for trading, and is submitting a draft prospectus to the Israel Securities Authority. The TASE said that the Jefferies investment bank, which recently became a remote TASE member, would lead the IPO. Last September, TASE CEO Ittai Ben-Zeev said, "There will be no IPO at a value of less than NIS 551 million" - the value at which some of the purchasers of shares in the TASE made their investments when the Israeli TASE members, especially the banks, surrendered their control over the TASE.
The TASE says, "The IPO will be based on financial statements for the first quarter of 2019," when the TASE posted a NIS 5.4 million net profit, compared with an NIS 8.1 million net profit in the corresponding quarter last year. The TASE explains that the decrease in revenue and rise in expenses caused its fall in profit, offset by an increase in financing revenue on the company's investment portfolios.
The TASE's reports also show that following a decline in its trading volumes starting in the first quarter of this year, its revenue in the quarter fell to NIS 64.6 million, 2% less than in the first quarter of 2018. The TASE said, "The decrease in revenue results from a decline in trading and clearance turnovers, similar to the general global trend, and from the effect of the reform in exchange-traded funds (ETFs) in late 2018… Revenue from the non-trading items rose, compared with the corresponding period in 2018." The TASE added, "Implementation of the IFRS 16 standard and a rise in marketing expenses were the principal factors in increasing quarterly expenses to NIS 61.7 million."
The TASE plans to offer a third of its shares, after becoming an ordinary for-profit company. In the framework of the change in ownership structure, its shares were sold to five foreign concerns, led by US-Australian company Manikay Partners LLC. The other four foreign investors who bought TASE shares were Dalton, Moelis, Sansuper, and Danish firm Novo Nordisk Foundation, which is based on international drug company Novo Nordisk. Novo Nordisk Foundation. The foreign investors transferred most of their shares to a trustee - Moshe Tery - in preparation for having them offered to the public. This was part of the buyers' commitment to putting up for sale a large proportion of their holdings in the TASE, although even after the offering, each of the four will be left with holdings of just under 5% each.
6% of the shares have already been given to the TASE's employees in exchange for consenting to the IPO. The TASE's IPO was originally scheduled to take place last year, but was postponed because of disputes with its employees, who wanted additional benefits. This dispute is still outstanding in the National Labor Court, which has yet to make a ruling in the matter.
Published by Globes, Israel business news - en.globes.co.il - on June 6, 2019
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