Gov't officials oppose Golan Telecom sale to rival

Michael Golan  picture: Tamar Matzapi
Michael Golan picture: Tamar Matzapi

Golan Telecom is reportedly asking NIS 1 billion on the basis of NIS 500 million annual revenue and NIS 80-90 million EBITDA.

A meeting held this morning by Israeli government officials raised concerns over the sale of mobile carrier Golan Telecom Ltd.. As revealed by "Globes" last week, bids are meant to be filed this week for the acquisition of Golan, with rivals Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Pelephone Communications Ltd., and HOT Mobile Ltd. all expressing interest. Consequently, the government has formed an agreed position on the sale, which was presented to Golan Telecom, in which the government would unlikely approve a deal involving an existing Israeli mobile carrier. The government feels such a deal would harm competitiveness.

The aim is to bring about a sale of Golan Telecom to a party outside of Israel's telecom sector. Alternatively, the government would like to see Golan Telecom remain a [player in the market, perhaps signing a network sharing deal with Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL).

Golan Telecom is reportedly asking NIS 1 billion on the basis of NIS 500 million annual revenue and NIS 80-90 million EBITDA.

Opposition to the sale of Golan Telecom is led by the Israel Antitrust Authority and the Ministry of Finance, although the latter has no authority on the matter. The government feels certain that a merger between Golan Telecom and a rival would push up prices in the sector. Moreover, Golan Telecom had declared it would also become a TV operator, and the government is not eager to lose a potential player in this sector.

Golan is in financial difficulties because it must invest in a network sharing agreement with Cellcom or pay its rival a NIS 350 million fine.

Published by Globes [online], Israel business news - www.globes-online.com - on October 26, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Michael Golan  picture: Tamar Matzapi
Michael Golan picture: Tamar Matzapi
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