HOT shareholders approve Mirs acquisition

The acquisition is a party at interest deal; Patrick Drahi controls HOT and owns Mirs.

After several postponements, HOT Telecommunication Systems Ltd's (TASE: HOT) disinterested shareholders today approved the company's acquisition of Mirs Communications Ltd. for NIS 500 million in cash and NIS 450 million in future milestone payments. The acquisition is a party at interest deal; Patrick Drahi controls HOT through Cool Holdings Ltd. and owns Mirs.

In recent weeks, HOT has been trying to persuade institutional investors in the company to vote in favor of the deal, after they opposed it because of the NIS 1 billion price tag in cash. In response, HOT restructured the deal.

Drahi owns 51.7% of HOT and could not vote in the shareholders meeting because he is a party at interest. HOT's institutional investors hold only small stakes in the company, but their vote was critical as the parties at interest in the deal may not vote on it. The proportion of disinterested shareholders voting against the deal could not exceed 2%.

HOT's acquisition of Mirs is part of the consolidation in the telecommunications market.

HOT's share price rose 1.5% today to NIS 48.10, giving a market cap of NIS 3.7 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on September 20, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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