The sale of Eurocom’s stake in DBS Satellite Services (1998) Ltd. (Yes) to Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) has been approved by the Bezeq board of directors, according to an announcement made by Bezeq to the Tel Aviv Stock Exchange (TASE) today. In the deal, Bezeq will buy Eurocom’s shares in Yes (50.22%), as well as the loans issued to the company by its owners totaling NIS 1.538 billion.
The shares will be bought for between NIS 680 million and NIS 1.05 billion, depending on milestones. The immediate payment to Eurocom will be NIS 680 million cash, plus up to NIS 200 million depending on tax synergies, and up to NIS 170 million more depending on Yes’s business performance over the next three years.
Bezeq controlling shareholder Shaul Elovitch will lose between NIS 450 million and NIS 800 million on his personal stake in Yes.
Since first investing in the company sixteen years ago, the adjusted cost of Eurocom totaled NIS 1.5 billion, and Eurocom drew neither dividends nor management fees from Yes.
Bezeq CEO Stella Handler said, “This is a strategic deal for Bezeq, which will turn it into a complete communications company. The closing of this deal will make it possible for Bezeq to offer packages of services that include content for the first time, like the leading communications companies around the world, and to create synergies that were hitherto impossible. Buying Yes is excellent news for the company’s customers, who will be able to enjoy a full suite of products with the uncompromising service standard to which Bezeq customer have grown accustomed.”
The deal was made possible by a special committee set up by Bezeq's board last year. Because this was a party at interest deal, the committee was comprised solely of external directors. The committee was assisted by Merrill Lynch International of the the Bank of America Group and other experts in issues regarding the deal.
Published by Globes [online], Israel business news - www.globes-online.com - on February 11, 2015
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