| Thursday , Sep 28, 2000 Sun-Thu at 18:00 (GMT+3)
Scitex Likely to Dribble Creo Shares onto MarketBy Avishai Ovadya
Given time, the market does not lie. While it is sometimes hard for us to understand phenomena like deep discounts and astronomical multiples, in the end, the market “knows” its job. The best example is Nasdaq-listed Scitex.
It is no secret that Scitex is traded at a deep discount relative to its holdings. Nor is it a secret that analysts unhesitatingly recommend Scitex. So why does Scitex refuse to climb out of the mire? It may be because Scitex is always talking about added value, but finds it hard to actually do it. Even Clal Industries general manager and Scitex chairman Rimon Ben Shaoul believes that Scitex is busier talking the talk than walking the walk (maybe he is referring to himself?).
Ben Shaoul told “Globes” in an interview that the market is waiting for Scitex’s management to perform, which will be expressed in the share price. Ben Shaoul is mainly referring to the issue of its wide format division and VIO, the joint Internet venture with British Telecom. However, added value can also be based on the sale of Creo shares, which is traded on Wall Street at a company value of $1.6 billion, and in which Scitex owns 27%. Creo has recently surged to $33.5, doubling in last ten weeks
In fact, Scitex could sell its Creo shares as early as October under the terms of their merger. Scitex general manager Yoav Chelouche recently said that he believes in Creo and has no intention of realizing its shares at this stage. He added however that a realization at a low value is one of the possibilities to finance Scitex’s operations (these statements are taken from an analysis on Creo by Salomon Smith Barney). In any case, a large realization of Creo could raise dormant Scitex’s value, currently traded at $500 million, while its holding in Creo are estimated at $450 million.
One way or the other, Creo-Israel (a subsidiary established following the merger to absorb Scitex’s pre-printing operations), revealed innovating printing technology at the ongoing Graph Expo exhibition. The technology, called SP, enables digital printing without the need for lithographic plates in printing with offset printers. According to the company, the process’ advantage lies in the shortening of printing preparations to only a few minutes, after which it is immediately possible to go on to the next print job.
CreoScitex COO Erez Meltzer says, “The new process is likely to revolutionize the printing industry, making it faster, cheaper and more efficient. It won’t happen overnight. The process development is likely to take two years. In any case, penetrating the field will probably generate generous revenues for CreoScitex, which will also benefit from revenues from perishable products for the new technology’s machinery.”
Published by Israel’s Business Arena on 27 September2000 |
