Elovitch builds YES stake in order to sell it all

The deal reflects a company value of NIS 1.675 billion for the satellite broadcaster.

Shaul Elovitch is buying out all the small minority shareholders in DBS Satellite Services (1998) Ltd. (YES), and will own 50.2% of the satellite broadcaster through Eurocom Group. Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) owns 48.2%. The deal reflects a company value of NIS 1.675 billion for YES.

Eurocom will buy the 5.4% stake (4.5% fully diluted) in YES held Polar Communications Ltd. (TASE: PLRC) (as well as an owners loan by Polar Communications to YES) for NIS 75 million. Six months ago, Polar Communications sold 2.5% of YES to business Yoav Harlap, and he is now expected to sell his holding to Eurocom. Eurocom will buy the 4.7% of YES held by Lidan Ltd. for NIS 79 million and the 5% held by Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) for NIS 84 million. Before the deals, Eurocom owned 32.6% of YES.

The Antitrust Authority is aware of the deals. Elovich must sell his YES stake as a condition for acquiring the 30% controlling interest in Bezeq through Eurocom unit B Communications Ltd. (Nasdaq:BCOM; TASE: BCOM) (formerly Smile). Presumably it will be easier for him to sell a 50.2% controlling interest in YES than a minority interest in the company, which is why is buying out the minority shareholders.

Elovitch is not yet in meaningful talks for the sale of YES, but this will not rule out the closing of the takeover of Bezeq next month. The Antitrust Authority will probably set out a number of conditions for completing the Bezeq deal, in addition to Eurocom selling its holding in YES, and the parties are negotiating the terms for approval of the structure of the deal.

Published by Globes [online], Israel business news - www.globes-online.com - on March 21, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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