Discount Investment, Safra resume Cellcom negotiation

Negotiations are focusing on the purchase by Discount Investment of the Safra groups stake in Cellcom.

IDB Holding Corp. (TASE: IDBH) subsidiary Discount Investment Corporation (TASE: DISI) has announced that it has resumed negotiations with the Safra group for purchasing all of the latters 34.75% stake in Israeli wireless operator Cellcom.

Negotiations are believed close to a conclusion. The validity of the Safra groups first refusal rights to BellSouths (NYSE: BLS) 34.75% holding in Cellcom, which Discount Investment has agreed to buy, and of the Safra groups right to sell its stake to the purchaser, will expire in a few days. Ownership of Israels largest wireless operator will therefore soon be decided.

No contact took place between the parties for some time, but most questions have already been agreed, so little time is required to finalize an agreement.

As reported by "Globes" two months ago, IDB Holding chairman Nochi Dankner is believed about to conclude an agreement to purchase the Safra familys stake in Cellcom. It is believed that Discount Investment will pay a premium of $100-200 million on the $625 million price agreed between Discount Investment and BellSouth for the latters 34.75% stake. This makes the value of Cellcom for the deal $2.1-2.3 billion.

If the Safra group sells its Cellcom shares to Discount Investment, the latter will own 95% of Cellcom.

Should the deal go through, Discount Invesment will pay the Safra group and BellSouth (NYSE: BLS) $1.3-1.4 billion for 69.5% of Israeli wireless operator Cellcom (the state sold its controlling interest in Bezeq (TASE: BZEQ) for less than $1 billion). A communications group would now be able to form around Cellcom, consisting of the activities of Barak, NetVision Ltd. (TASE: ), Globcall, and Med-1.

Published by Globes [online] - www.globes.co.il - on August 8, 2005

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