Israeli fixed-line operator Netvision has agreed to merger talks following an NIS1.5bn (US$425.4m) offer by Israeli mobile operator Cellcom Israel.
In an announcement today, Cellcom said that Netvision has notified it of its willingness to discuss a…
Israeli fixed-line operator Netvision has agreed to merger talks following an NIS1.5bn (US$425.4m) offer by Israeli mobile operator Cellcom Israel.
In an announcement today, Cellcom said that Netvision has notified it of its willingness to discuss a tie-up.
Cellcom told the market on March 13 that it had approached Netvision owner IDB about buying Netvision, an international landline operator (ILD) that also provides domestic landline and internet services.
This follows a regulatory change enabling operators to hold an ILD licence if they agree to structurally separate the long distance operation from the cellular operation, and subject to the fulfillment of certain conditions, even without such structural separation.
A transaction would see Cellcom acquire all of Netvision’s outstanding share capital for cash consideration, based on its share capital’s estimated value of whereby Netvision would become a wholly owned subsidiary.
Cellcom said at the time that its proposal was subject to negotiating and finalizing terms of definitive agreements, further due diligence, independent valuation and receipt of fairness opinions in respect of the consideration to be offered, and approval by both companies’ audit committees and boards of directors.
Yesterday, Cellcom stated that is to start preparations for raising up to NIS500m (US$141.8m) in debt.
The company’s board has voted to offer Israeli investors additional series D debentures and series E debentures under Cellcom’s shelf prospectus. The proposed offering is subject to the filing of a supplemental shelf offering report with the Israeli Securities Authority (ISA) and the Tel Aviv Stock Exchange (TASE). The company noted that the timing, terms and amount of the offering have yet to be determined, and are subject to a further approval by the board.
The proceeds of such a transaction would be used for general corporate purposes such as financing the company’s operating and investment activity, refinancing outstanding debt under its debentures, partial financing of the proposed merger transaction with Netvision Ltd., or Netvision, if executed, and continued dividend distribution.
Cellcom emphasised that there is no assurance that such offering will be executed, nor as to its timing, terms and amount.
As of the end of last year, Cellcom Israel Ltd served some 3.394 million customers.
Netvision 013, the company’s full name, is the result of the 2007 merger of NetVision with 013 Barak and GlobCall. 013 NetVision is controlled by the I.D.B. Group through Discount Investments (33%), Clal Industries (26%) and Elron (16%), while the public holds approximately 25% of the shares.
