Israeli telco Bezeq has agreed a deal worth up to NIS1.05bn (US$271m) to buy the remaining 50.2% of local satellite broadcaster YES.
The group is acquiring the shares from Eurocom, a private holding company controlled indirectly by Shaul and Yosef…
Israeli telco Bezeq has agreed a deal worth up to NIS1.05bn (US$271m) to buy the remaining 50.2% of local satellite broadcaster YES.
The group is acquiring the shares from Eurocom, a private holding company controlled indirectly by Shaul and Yosef Elovitch, who are also Bezeq’s controlling shareholders.
It will pay NIS680m (US$175.4m) in cash for the shares on closing the deal, which is subject to shareholder and regulatory approvals. It could pay up to NIS200m (US$52m) more based on tax synergies, and a further consideration of up to NIS170m (US$44m) tied to YES’ business results in the next three years.
Bezeq said it is also acquiring the shareholder loans provided by Eurocom to YES, which stood at roughly NIS1.54bn (US$397.6m) at the end of 2014.
The telco’s journey to take over YES began in 2009 when regulators blocked it from raising its stake to 58% over competition concerns, following resistance from Eurocom which had yet to take control of Bezeq.
Regulators allowed Bezeq to raise its YES stake beyond 49.8% last year after attaching a number of conditions to a merger, reasoning that technological improvements since 2009 had made it easier for other players to challenge the combined group.
The conditions include limits on content exclusivity arrangements and the services that the merged group can offer.
Eurocom also has stakes in service provider Gilat and Israeli satellite operator Spacecom. A sale process for the latter attracted the attention of Spanish satellite operator Hispasat last year, although talks to acquire a controlling stake were called off in August.
However, a Hispasat spokesperson said in October that it could consider resurrecting the deal if the circumstances were right, as it seeks to expand outside its core Latin American and European markets.
Hispasat’s bid reportedly valued Spacecom at €350m (US$484m), a 25% premium on its market capitalisation.
When the Israeli operator told Israel’s stock exchange it was up for sale in late 2013, local reports claimed it was seeking US$500m-US$600m, or double its market cap.
SatelliteFinance understands JP Morgan was hired to run the sale.
Bezeq’s board used fairness opinions from BofA Merrill Lynch and Amir Barnea for its YES deal.
