Scitex sold the majority of its stake in Creo Products last week.

It was paid 55m ($78m) for the shares by several Canadian institutional investors.

"Our initial concern was that Scitex might sell to a hostile party," said CreoScitex vice president of marketing, Boudewijn Neijens.

There has been speculation in the Israeli media since the summer that it was looking to dispose of its 26% stake in the firm that owns CreoScitex.

It revealed last Thursday (29 November) that it had sold 7m of its 13.25m shares.

Under an agreement with the new shareholders Scitex cannot sell any more Creo shares for 90 days and is "not looking to sell soon", said Scitex chief financial officer Yossy Zylberberg.

As part of the two firms original deal in April 2000 Scitex had to seek approval from Creo to sell more than 1% of its holding in a three-month period.

"Were not too concerned about a hostile takeover now the staff and three principle shareholders own more stock than Scitex did," said Neijens.

"What this does is balance the portfolio much better, gives us cash and increases interest in Creo," said Zylberberg.

Scitex will use the money to pay off debts and fund acquisitions, although "theres nothing we see right now", said Zylberberg.

Both companies share prices rose following the announcement. As PrintWeek went to press shares were up 10% on last Thursday, with Creo at 8.40 and Scitex at 3.11.

In the last few months both shares prices have hit annual lows in the light of poor financial results.

Story by Barney Cox