Tao Tsuot Ltd. (TASE: TAO-M) controlling shareholder Ilan Ben-Dov plans to transfer 50.01% of Suny Electronics Ltd. (TASE: SUNY), which he also controls, to Tao, which will give Tao control of Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR). Ben-Dov is foregoing dividends from Partner in an effort to persuade Tao bondholders to accept a partial debt settlement.
Suny owns 78% of Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF), which owns 44.5% of Partner. The proposed deal will give Tao an indirect 37.5% stake in Partner.
The deal will make Tao eligible for quarterly dividends from Partner, which until now went personally to Ben-Dov. In exchange, he is asking Tao's bondholders to convert their bonds into shares, giving them 25% of Tao. Ben-Dov will own 755.
Tao had a shareholder's equity deficit of NIS 355 million at the end of 2010, after losing NIS 83.6 million on top of its NIS 155 million loss in 2009.
Tao's share price rose 40% by mid-afternoon to NIS 0.18, giving a market cap of NIS 56 million. Suny's share price fell 3.1% following the announcement to NIS 34.88, giving a market cap of NIS 1.11 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2011
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