Two groups in race to buy Golan Telecom

Gil Sharon Photo: Tamar Matsafi

Golan Telecom wants to conclude a sale before its NIS 600 million debt to Cellcom comes due.

Signs emitted by Golan Telecom Ltd. indicate that the measures for selling the company are going ahead. As far as is known, there are two groups showing interest in the company, one with former Pelephone Communications Ltd. CEO Gil Sharon and the other with 018 Xfone owner Hezi Bezalel. Both groups are in contact with Rothschild Bank, which is handling the sale.

The two groups attempted to combine forces, but as of now, it appears that each will act independently. Hot Telecommunication Systems Ltd. (TASE: HOT.B1) is also showing interest in acquiring Golan Telecom, but in view of concern about regulatory difficulties in obtaining approval for the deal, and given the fact that there are bidders who are not communications market players, Hot's chances of getting approval for a deal are poor.

Sources inform "Globes" that Sharon recently met with several government ministries to present the group he leads, and in order to announce that an external group has been created that has submitted a bid to acquire Golan Telecom. The purpose of the meeting was to deliver the message that the sale of Golan Telecom to Hot should not be approved. One of the main reasons for opposition to the sale of Golan Telecom to Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) was that the state was willing to allow the sale of the company only to an external player, not an existing one, in order to avoid reducing the number of players in the market.

Golan Telecom is terminating its contract with Cellcom by November this year, and unless it is sold, or some other event occurs, it will have to pay Cellcom NIS 600 million. Any deal that Golan Telecom wants to make will have to take into account its debt to Cellcom. In addition to the debt, which results from Golan Telecom's use of Cellcom's infrastructure, when the agreement ends in November, Cellcom can demand more money from Golan Telecom for the use of its network. In this situation, Golan Telecom prefers to complete the sale of the company as quickly as possible.

Published by Globes [online], Israel business news - www.globes-online.com - on September 11, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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Gil Sharon Photo: Tamar Matsafi
Gil Sharon Photo: Tamar Matsafi
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