Microsoft, Google ‘deal’ lifts Mellanox

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 NEW YORK — Mellanox Technologies’ rally in New York has widened the premium over the Tel Aviv shares to the biggest in a month after a report said that the Israeli company will sell equipment to Microsoft Corporation and Google.

The maker of equipment that speeds data transfers surged 11% to $48.97 in the US, leaving the shares 7% above the Tel Aviv-listed stock.

The Bloomberg Israel-US equity index snapped a four-day slump. Allot Communications posted a record advance on new orders, swelling its premium over the shares in Israel to 5.6%.

Mellanox Technologies slumped the most in more than four months in Tel Aviv early this month as UBS cut the company’s rating on plans to delist in Israel on September 1.

An unsourced Globes newspaper report said on Tuesday that Mellanox was close to signing a deal to provide equipment for internet projects by software maker Microsoft and Google, the owner of the largest search engine. The deal would generate as much as $200m in revenue.

Iowa governor Terry Branstad announced last Friday that Microsoft would expand a data centre in the state and there was a « high probability » that Mellanox was part of the project, according to Jonathan Kreizman, an analyst at Clal Finance Batucha Brokerage.

« We think that both of these deals are not being factored into the street’s estimates, » Mr Kreizman, who has the equivalent of a buy rating for Mellanox, said.

« So, on a yearly basis, this could strongly impact the fourth quarter of 2013 and potentially also the first half of 2014. »

Mellanox’s Tel Aviv-traded stock increased 5.2% yesterday to 165 shekels ($45.75).

 

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