Matav Cable Systems Media (Nasdaq: MATV; TASE: MATV), controlled by the Delek Group (TASE: DLEKG), has decided to accept only an option to participate in the sale of Partner Communications (Nasdaq: PTNR; TASE: PTNR; LSE: PCCD) shares by its Israeli shareholders, because the shares are part of Matav's planned merger with International Television Holdings (Tevel). Sources inform “Globes” that that if Matav and Tevel merge, Matav's 5.3% stake in Partner will be transferred to the banks.
If Matav and Tevel do not merge before Partner's Israeli shareholders sell their stakes in the company, Matav will probably exercise its option and sell its shares in Partner to Partner itself.
The negotiations between Matav and the banks have reached an advanced stage, but Bank Leumi (TASE: LUMI) has raised obstacles, and does not accept some of the conditions that Bank Hapoalim (LSE: BKHD; TASE: POLI), First International Bank of Israel (TASE: FTIN1;FTIN5), and Israel Discount Bank (TASE: DSCT) have already agreed to. Bank Leumi owns 21% of Tevel.
Delek Group controlling shareholder Yitzhak Tshuva would prefer that Matav's stake in Partner constitute part of the Matav-Tevel merger, because he could then sell all his Partner shares, whereas if Matav joins Partner's other Israeli shareholders in selling the shares, he will only be able to sell his 4% stake in Partner. This is because the law requires Israeli shareholders to own at least 5% of Partner, even after selling the rest of their stakes. Matav will still own 1% of Partner after any sale.
Partner's Israeli shareholders - Elron Electronic Industries (Nasdaq: ELRN; TASE: ELRN), Eurocom Communications, and Polar Investments (TASE: PLR) - are selling their stakes at a 17% discount, whereas Matav prefers selling its Partner stake at their full value.
Tshuva plans to acquire control of the cable companies through a series of transactions begun in mid-2002.
Published by Globes [online], Israel business news - www.globes.co.il - on February 14, 2005