French businessman Patrick Drahi’s Cool Holding has proposed to buy the 30.75% of shares in Israel’s Hot Telecommunication Systems it does not already own for nearly NIS830m (US$207m).
Cool has offered shareholders NIS37 (US$9.20) per share, valuing…
French businessman Patrick Drahi’s Cool Holding has proposed to buy the 30.75% of shares in Israel’s Hot Telecommunication Systems it does not already own for nearly NIS830m (US$207m).
Cool has offered shareholders NIS37 (US$9.20) per share, valuing the company at NIS2.695bn (US$670.14m), according to a release by Tel Aviv-based Hot quoting a letter from Cool.
In its letter, Cool said the proposed price represents a 12.5% premium on Hot’s average closing share price for the preceding month.
Cool noted in its letter that recent changes in the Israeli communications sector – including new regulations and increased competition – have altered investors’ assessment of the company, which is listed on the Tel Aviv stock exchange, andwider market. Cool added it believes the risks posed by these changes would be better dealt with by a privately-owned entity.
Cool plans to set up a new company for the purposes of the transaction, which will be subject to regulatory approvals and other conditions. All the same, Cool expects to be able to close the deal within 30 days of obtaining Hot shareholders’ approval, at which point it would de-list the telecoms group from trade in Tel Aviv. It intends to keep a number of Hot bonds listed on the exchange, however, so the company will still have to report to independent board members.
Cool said it is also working to secure financing for the transaction.
Founded in 1987, Hot reported total revenues of US$525m for the first half of 2012, up from US$420 million for the same period the previous year. It is Israel’s sole cable TV operator, with about 893,000 subscribers, and also provides fixed-line, mobile and internet services.
