Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) intends to acquire full control of its internet portal subsidiary Walla Communications Ltd. (TASE: WALA). Bezeq has published an offer to purchase Walla! at NIS 5.25 per share - a 50% premium on today's opening price - for a total of NIS 68.15 million.
Walla's share price rose 46% by mid-afternoon to NIS 5.10, following the announcement, giving a market cap of NIS 240 million. Bezeq's share price is up 1.2% to NIS 6.35, giving a market cap of NIS 17.1 billion.
Bezeq owns 71.55% of Walla! The deadline to respond to the offer is April 5. If Bezeq receives positive responses from shareholders who own 23.45% of Walla!, it can compel the purchase of the remaining shares.
Yesterday, Walla! published its financial report for the fourth quarter and full-year of 2011. The company posted its first quarterly loss in seven years. Full-year revenue rose 11% over 2010 to NIS 200 million in 2011, but the company posted a net loss of NIS 6.3 million, compared with a net profit of NIS 9 million in 2010 and NIS 20 million in 2009.
Walla! attributes the deterioration in its results to the social protest and NIS 3.7 million in one-time expenses for the cancellation of a tax break and an NIS 8 million write-down on its investment in online classified ads site Yad2 in 2010.
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2012
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