The share price of Israel Chemicals Ltd. (TASE: ICL) has dropped some 1.5% on the Tel Aviv Stock Exchange this morning following the remark by Potash Corporation of Saskatechewan CFO Wayne Brownlee that his company will not hold its stake in Israel Chemicals forever. Potash owns 13.84% of Israel Chemicals.
The market interprets the remark as representing future pressure on Israel Chemicals' share price, but professional market sources paint a more balanced picture. "This is a matter of power plays against the state in the wake of the Sheshinski 2 committee recommendations," a senior trader says, "Potash's aim, as the second largest shareholder in Israel Chemicals after Israel Corporation, is to exert pressure on the decision makers in Israel. I don't say, Heaven forbid, that Potash is lying, but the CFO's statement is very general, and applies to just about every asset, that it will not be held forever."
A market analyst told "Globes", "This is a very general remark that doesn't mean much at this stage. You have to remember that Israel Chemicals is about to make an offering overseas, and if Potash wants to sell its holding, it will be able to do so on a scale characteristic of global markets, to strategic investors that would like to gain a foothold in Israel Chemicals. In any event, Potash will not wish to harm Israel Chemicals' share price, and thereby harm its own interests and those of its shareholders."
Published by Globes [online], Israel business news - www.globes-online.com - on June 10, 2014
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