It is not difficult to guess why Haim Saban believes that a deal for cellular operator and Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) will be profitable for him. Like all Israel's telecom company stocks, Partner's share price is far from its peak, while Saban has sensed changes in the market's structure as well as the streamlining being carried out. He feels that these will do the trick and he can see a reasonable return on his investment over the medium term.
Saban is not a long term player. Thus at the right price it is worth his while investing in Partner. However, as the days go by and the price rises, the potential profit in the deal will fall. So if an agreement is not concluded relatively swiftly, it is safe to assume that the deal will not be completed.
Fair treatment from the regulator
It is somewhat presumptuous to believe that Saban will know better how to manage Partner than its current controlling shareholder Ilan Ben-Dov. This is not the same as Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), which Saban bought knowing that it was a government telecom monopoly about to undergo a streamlining that would yield results. Partner, as in any market sector, is streamlining because it has to. Saban's management value is in creating peace of mind and confidence for investors who know that the company is in safe hands. That role is currently being played by Partner CEO Haim Romano who has succeeded in distancing Ben-Dov's troubles from the daily management of the company.
Saban believes that he will receive fairer treatment from the regulator if he holds a controlling interest in Partner, as happened when he invested in Bezeq after Yaacov Gelbard departed as CEO to be replaced by Avi Gabbay. Saban's status in the eyes of the decision makers is different. He won't whine about what he has been bequeaths or beg for the market to be redressed to repair the damage done to him during Moshe Kahlon's term of office as Communications Minister. He will know how to elegantly articulate what is important for the cellular market and the four groups competing in it: a competitive wholesale market, the possibility of mergers, easements in cooperation over sites, and setting up joint networks.
Published by Globes [online], Israel business news - www.globes-online.com - on October 14, 2012
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