Israeli holding company Cool Systems has exercised an option to increase its stake in local leading cableco HOT from 51.7% to 65%, reports local newspaper Globes.
The buyer, which is controlled by French businessman Patrick Drahi, will pay some NIS650m…
Israeli holding company Cool Systems has exercised an option to increase its stake in local leading cableco HOT from 51.7% to 65%, reports local newspaper Globes.
The buyer, which is controlled by French businessman Patrick Drahi, will pay some NIS650m (US$188.7m) to buy around 10 million shares from Yediot Communications – which will see its own stake drop to 3.3%.
The price represents a premium of around 13% on HOT’s share price at the end of last week.
Some 76% of the transfer will take place in November 2011, and the remainder a year later.
The financing will be provided by Israel Discount Bank and Mizrahi Tefahot Bank, Globes wrote.
This most recent deal takes Cool one step closer to its objective of merging HOT with number four mobile operator and recent 3G licence winner MIRS Communications, which is also controlled by Drahi. In May, HOT informed the Tel Aviv Stock Exchange that it had started merger talks with MIRS, and that its board had approved such a tie-up.
It declined to name the consultants it has mandated to carry out valuations and advise on deal structure. At the time, local media speculated that the transaction could take the form of a cash buy or a share swap, valuing MIRS at NIS1- 1.2bn (US$290-347m).
At the back end of last year, Cool bought another 6% stake from Fishman Holdings, whose stake now stands at 6.5%.
Stella Handler, who last month left the helm of ISP 012 Smile after its recent sale to Partner, will lead the merger and integration effort as the chairwoman of HOT. Once the deal is done, Drahi will be on course to go head to head on quadruple play with the incumbent, Bezeq.
The proposed tie-up comes in the wake of mobile operator Partner agreeing to absorb international landline operator (ILD) and ISP 012 Smile, and rival cellco Cellcom looking to buy 100% of ILD and ISP Netvision from the holding company that owns them both, IDB.
All stem from the Ministry of Communication (MoC)’s recent approval of changes enabling mobile operators to hold an ILD licence if they agree to a structural separation between their long distance and cellular operations – meaning separate managements and separate IT systems. Previously, these kinds of companies have been owned as separate entities, but often under the umbrella of a single holding group.
The MoC has said it will no longer require structural separation by the close of 2012, or until a sufficient number of MVNOs are in place, whichever happens sooner.
What this will mean for consumers, who until now have had to pay separately for different telecoms services offered by the same telecoms provider, is the opportunity to buy triple or quadruple play products.
“The regulator now feels that it is better to have five big groups providing all services than many companies competing to offer many services”, Hapoalim analyst David Levinson told TelecomFinance last month.
MIRS and HOT were not available by press time.
