Canadian investment firm Brookfield Asset Management is emerging as one of the parties interested in acquiring telecommunications company Cellcom. The firm has expressed readiness to enter into negotiations with Cellcom’s controlling shareholder Discount Investment, which is controlled by Michael and Daniel Salkind's Elco.. Brookfield manages investments all over the world and recently decided to enter Israel. The firm is advised by HSBC.
Barclays has begun the process of finding an investor to buy Cellcom, and in that context Brookfield expressed interest. Barclays was readying for the stage of presentations to investors and opening information rooms, but meanwhile the approach was received from Brookfield and it was decided to give a chance to negotiations with them.
Because of Brookfield’s widespread investments, buying the controlling interest in Cellcom could be complicated for it, since it will require approval from the Ministry of Communications and the Ministry of Defense. In the past, the acquisition of a mobile telephony company by a company with investments in Arab countries has met with opposition from the defense establishment.
A few months ago, Brookfield tried to do a deal with Cellcom for the purchase and lease-back of its cellular sites. This was part of an attempt by Discount Investment to find a solution to the problem of its debt to its bondholders. The deal broke down because of objections by the workers committee.
It seems that since then Brookfield has continued to seek investments in Israel, and the fact that Cellcom was put up for sale creates an opportunity for it to buy the company and then finance the purchase through a leasing deal on the sites.
Discount Investment recently sold 9.9% of Cellcom for NIS 313 million, reducing its holding in the company in order to make the process of selling control easier.
Published by Globes, Israel business news - en.globes.co.il - on August 23, 2022.
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