Teva deal boosts Israeli pension funds

Teva
Teva

Israeli pension funds have earned hundreds of millions of dollars on their holdings in Teva's fast-rising shares.

The Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) share price shot up 16.4% in trading on the New York Stock Exchange yesterday, after the company announced its acquisition of the generic division of Allergan, closing at a peak of $72, reflecting a $61 billion market cap, and giving its investors reason for satisfaction.

Who are the major beneficiaries from the yesterday's surge in the company share? Teva's shares are widely dispersed, and there are not many parties at interest (a holding of 5% or more). The value of the largest holding in Teva, 5.6%, which belongs to US multinational financial services corporation Fidelity Management and Research (FMR), climbed over $500 million to $3.45 billion yesterday.

Almost all Israeli financial institutions hold shares in Teva, but each one owns only a very small percentage of the company's capital. According to the stocker.co.il website, the largest of these holdings belongs to Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), whose mutual funds hodl 640,000 shares , and which keeps 7.7 million Teva shares in its long-term savings. Migdal's paper profit from yesterday's jump in the share price was almost $85 million, giving its holdings a current market value of $602 million.

Also prominent in their long-term savings instruments invested in Teva were Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), whose Teva shares are worth $372 million, following a $52.4 million paper profit yesterday; Amitim (shares worth $315 million and a $44.4 million paper profit); Menorah Mivtachim Holdings Ltd. (TASE: MORA) ($288 million and $40.6 million); and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) ($260 million and $36.6 million).

The mutual funds' holdings in Teva were much smaller. Other than Migdal, the most prominent was Psagot Investment House Ltd., with holdings worth $30.6 million and a paper profit yesterday of $4.3 million; Yelin Lapidot (holdings worth $24.2 million); Harel ($21.9 million); and Meitav DS Holdings Ltd. (TASE:MTDS) ($20.4 million).

The Altshuler Shaham Ltd. investment house, on the other hand, has less confidence in the Teva share; in fact, its mutual funds hold short positions in the share. At the "Globes" capital market conference several weeks ago, Altshuler Shaham CEO Gilad Altshuler told "Globes," "If the acquisition (of Mylan Pharmaceuticals) takes place, I prefer to stay away from Teva. The rapidity with which Teva offered to acquire Mylan strikes me as a shot from the hip, and such things don't usually succeed."

Published by Globes [online], Israel business news - www.globes-online.com - on July 28, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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