Israeli success in EU hindered by culture

Acting Prime Minister Ehud Olmert has called upon the European business community to encourage bilateral trade cooperations with Israel, but some say Israeli entrepreneurs still have to learn their lesson in how to conduct business the European way. "Europe is the most important trade partner for Israel. The volume of bilateral trade between Europe and Israel has reached an annual high of nearly $30 billion," Olmert told investors at the sixth Go4Europe business conference organized by investment bank Cukierman & Co. at the Hilton Hotel, Tel Aviv, on Monday. The conference focused on cross boarder business cooperations with Europe via investment opportunities, initial public offerings or mergers and acquisitions. Olmert, who received a warm welcome from the conference's 1000 participants, including some 200 European business people, stressed the need for more international cooperation agreements and investments from Europe to try to keep up the momentum. Meanwhile, representatives of European and Israeli corporations and financial institutions at the conference lamented that the reasons for the failure of some Israeli companies to go European were often of a cultural nature. "There are great entrepreneurs in Israel and a lot of technological innovation, which makes investors look towards Israel. But Israelis think they can do everything on their own and in their fast way, which is sometimes not the way business is done in Europe, and thus results in failed negotiations," said Peter E. Rasenberger, CEO of Cukierman Rasenberger Toschek AG in Germany. Speaking on the panel "European IPO - Raising money in Europe," Shmuel Koren, CFO of Visonic Technologies - which in 2004 completed the first initial public offering of an Israeli company on the London Stock Exchange in four years raising only $18m. instead of the planned $20m. to $25m. - admitted to having learned the lesson. "We were too fast, we didn't do our best to understand the investment community and we were punished severely," said Koren. Offering stocks in London has become a more attractive option for Israeli companies than a Nasdaq listing. But Israeli shares listing for trade on European stock exchanges have not done well. Advantages of listing on the LSE main market, or the AIM market for growth companies, include greater visibility in the smaller European field, less regulatory hurdles, and lighter compliance requirements. Listing in London is also cheaper than a US listing, and comes with lower auditing costs, as the Securities and Exchange Commission's Sarbanes Oxley Act raises the bar for corporate disclosure. "There has been a lot of interest from Israeli companies to list on the European markets, but some have come to the market in an aggressive and opportunistic manner. This has created a certain reputation," Erik Wenngren, Euronext's director of international listings told The Jerusalem Post.