Discount Investment Corporation Ltd. (TASE:DISI) has notified investors that it has signed an agreement to sell its 35.7% controlling stake in Israeli telecom company Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) Israeli private equity firm Fortissimo Capital managed by its founder Yuval Cohen.
Discount investment Corporation is selling the stake for NIS 925 million, reflecting a market cap of NIS 2.6 billion, a 20% premium on the company's share price at the beginning of the month. Discount Investment Corporation, led by CEO Nataly Mishkan-Zakai, will book a NIS 145 million loss on the sale but will receive an important injection of capital to ease the company's debt. Discount Investment Corp. is jointly controlled by Mega Or Holdings (TASE: MGOR), controlled by Zahi Nahmias, and Elco (TASE: ELCO), controlled by brothers Daniel and Michael Salkind with each holding a 29.8% stake.
Fortissimo has deposited NIS 46 million with the trustee, which will be transferred to Discount Investment Corp. when the deal is completed, within 120 days, although each side has an option to extend the deadline by a further 60 days. Fortissimo will require approvals from the Ministry of Communications, Israel Electric Authority and the Israel Competition Authority.
In November, Cellcom reported to investors that it has 3.5 million mobile phone subscribers and a market share in Israel of 31%. The company has a fiber optic infrastructure reaching two million households and ended the first nine months of 2023 with revenue of NIS 3.28 billion, up 1% from the corresponding period of 2022, and net profit of NIS 101 million, down 6.4% from the corresponding period.
Published by Globes, Israel business news - en.globes.co.il - on December 18, 2023.
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