Israeli brokerage IBI has questioned if minority shareholders of HOT Telecommunication Systems are happy with the recently increased offer by HOT’s controlling shareholder to purchase the remaining stake of the company.
French businessman Patrick…
Israeli brokerage IBI has questioned if minority shareholders of HOT Telecommunication Systems are happy with the recently increased offer by HOT’s controlling shareholder to purchase the remaining stake of the company.
French businessman Patrick Drahi already owns 69.25% of the Israeli telco through Cool Holding. As TelecomFinance previously reported, in late August Drahi offered shareholders NIS37 (US$9.20) per share, valuing the company at NIS2.695bn (US$670.14m).
Drahi has now increased his offer by a shekel to NIS 38 (US$9.86) a share, creating what will be a NIS852m (US$221m) deal if the offer is accepted, according to media reports. Drahi is said to be in talks with foreign banks to secure the financing.
Ori Licht, head of equity research at Israeli brokerage IBI, is unsure whether the shareholders will accept Drahi’s new offer. “NIS38 is a fair price but investors are often looking for more in these situations as they know they have the control over the sale,” he told TelecomFinance. “I think they will expect a higher offer, of around NIS 40.”
Drahi’s proposal will be submitted to HOT’s general shareholders meeting for approval on 4 November.
Licht went on to say that HOT is experiencing a challenging time due to imminent regulatory changes in Israel. “Multi-channel TV is their main business and new regulations going through the Israeli government are going to make this more difficult,” he added.
“However, their recently-acquired [wireless telco] subsidiary Mirs Communications has grown faster than expected, so their strategy is going well.”
