Teva deal boosts Israeli pension funds
The Teva Pharmaceutical Industries Ltd. share price shot up 16.4 percent in trading on the New York Stock Exchange on Monday after the company announced its acquisition of Allergan generic division, closing at a peak of $72. That reflected a $61 billion market cap and gave its investors reason for satisfaction.
Who are the major beneficiaries from Monday’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-corporation Fidelity Management and Research, climbed over $500 million to $3.45b. on Monday.
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., whose mutual funds holds 640,000 shares and which keeps 7.7 million Teva shares in its long-term savings. Migdal’s paper profit from Monday’s jump in the share price was almost $85m., giving its holdings a current market value of $602m.
Also prominent in their long-term savings instruments invested in Teva were: Clal Insurance Enterprises Holdings Ltd., whose Teva shares are worth $372m., following a $52.4m. paper profit on Monday; Amitim (shares worth $315m. and a $44.4m. paper profit); Menorah Mivtachim Holdings Ltd. ($288m. and $40.6m.); and Harel Insurance Investments and Financial Services Ltd. ($260m. and $36.6m.).
The mutual funds’ holdings in Teva were much smaller. Other than Migdal, the most prominent was Psagot Investment House Ltd., with holdings worth $30.6m. and a paper profit of $4.3m.; Yelin Lapidot (holdings worth $24.2m.); Harel ($21.9m.); and Meitav DS Holdings Ltd. ($20.4m.).
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.”