Motorola demands penalty fee if MIRS bidders fail to gain regulatory approval

22 Sep 2009

Motorola Israel has reportedly demanded that those companies bidding for the 100% stake in iDEN operator MIRS Communications must pay a penalty fee of ILS50 million (USD13.4 million) should the Israeli Ministry of Communications (MoC) and the Antitrust Authority fail to approve the deal. According to Globes Online, those companies that have placed bids for MIRS are likely to inform Motorola that they view the recently inserted penalty clause as null and void; in addition those companies making offers are also expected to add other conditions to their bids, including making bids subject to valuations of MIRS after the winner is picked.

The deadline for bids for the 100% stake is today, and those expected to place bids include Bezeq subsidiary Pelephone, 012 Smile.Communications and French businessman Patrick Drahi. HOT Telecommunication Systems has decided against placing a bid, allowing Mr Drahi, a shareholder in the cableco, to do so, and it is thought that should he win the auction process a merger of HOT and MIRS could be considered. One company that has confirmed it has placed a bid is Partner Communications, Israel’s second largest mobile network operator by subscribers. Partner has noted that its offer is subject to conditions, although it has not detailed what these are.

Israel, HOT Mobile