Following a report in "Globes," Elco Holdings Ltd. (TASE: ELCO) subsidiary Electra Consumer Products Ltd. (TASE:ECP) today notified the Tel Aviv Stock Exchange (TASE) that it was negotiating to acquire Golan Telecom Ltd. for NIS 350 million. The negotiations have made progress, and the announcement to the TASE shows that the deal is in the very advanced stages.
Despite the announcement, experience shows that when Golan Telecom is involved, no deal is guaranteed until it is actually signed; contacts and talks with other groups are therefore continuing. At the same time, it appears that at this stage, the negotiations with Elco are the most advanced. Elco also has a network consolidation agreement with Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), so it is likely that the conditions have already reached an advanced stage.
A court yesterday sent Cellcom and Golan Telecom to arbitration, following Cellcom's petition for liquidation of Golan Telecom. Formally, the arbitration proceedings will continue until January 29, 2017, but if the deal is completed, the arbitration proceeding will in any case be called off.
Former Pelephone Communications Ltd. CEO Gil Sharon is leading Elco in the acquisition talks. An agreement with Golan Telecom also requires an agreement with Cellcom on consolidation of networks and debt rescheduling, in which Elco will pay an estimated NIS 200 million annually for the use of Cellcom's network and 50% of the rights in the network. The agreement with Cellcom, which will be a long-term one, will service Golan Telecom's NIS 600 million debt to Cellcom.
Published by Globes [online], Israel business news - www.globes-online.com - on December 6, 2016
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