Two subsidiaries of Hong Kong-based conglomerate Hutchison Whampoa have terminated an agreement to acquire an indirect stake in Israeli mobile operator Partner Communications, following concerns over Partner’s financial performance.
In early June, it…
Two subsidiaries of Hong Kong-based conglomerate Hutchison Whampoa have terminated an agreement to acquire an indirect stake in Israeli mobile operator Partner Communications, following concerns over Partner’s financial performance.
In early June, it had been announced that Persall and Kelburgh would buy 50% and 25% respectively of Scailex Corporation from Suny Electronics for US$125m. Scailex is Partner’s largest shareholder with a 44.5% interest. If completed, Hutchison would have indirectly controlled 33.4% of Partner.
As part of the transaction, Scailex was expected to sell its Samsung mobile handsets importing business to Suny for US$100m in order to reduce its debts.
Scailex owes Hutchison US$300m as well as about US$460m to third parties, and the Hong Kong conglomerate had agreed to extend the repayment date of Scailex’ US$300m loan by three years to 2017.
The deal was subject to the approval of the Israeli antitrust authorities, relevant shareholders, the sale of the Samsung importing unit and the successful repurchase of at least 50% of Scailex’ non-convertible bonds.
But Scailex said today (21 August) that the Hong Kong based company called off the deal following concern about the substantial decline in Partner’s financial results for Q2. Hutchison was also quoted saying that it could not buy Scailex bonds because of the bondholders’ opposition against the offer.
Hutchison founded Partner in 1997 before selling its 51% stake in the company to Scailex for US$1.38bn in 2009. Partner, which operates under the Orange brand, is the second-largest mobile operator in Israel.
