Motorola presses 012 Smile and Cool Holdings for improved MIRS bids

12 Oct 2009

Merrill Lynch Israel, which is handling the sale of Motorola Israel’s iDEN subsidiary MIRS Communications, has called on both 012 Smile.Communications and Patrick Drahi’s Cool Holdings to submit revised bids, Globes Online reports. Neither company, however, is expected to make a significant increase in their offers. Bezeq subsidiary Pelephone meanwhile, which also submitted an offer for MIRS, has not been called on to improve its bid, having offered an estimated USD250 million for the trunking operator. Partner Communications and Cellcom who had both submitted initial bids have since pulled out of the sale process, while Rapac Communication & Infrastructure, which last week asked Merrill Lynch for permission to submit a late bid, has yet to receive approval for such an offer.

Motorola Israel and Merrill Lynch are expected to meet next week to discuss the options for moving the sale process forward. It is thought that Motorola remains undecided as to whether to sell to 012 Smile or Cool Holdings for around USD150 million in what would likely be a straightforward transaction, or whether to risk selling to Pelephone, with the possibility that the Ministry of Communications (MoC) could block the sale due to competition concerns. Another possible roadblock to any deal with the incumbent is that it is refusing to agree to a USD50 million penalty should the regulator step in and disallow the sale. Motorola may, it is claimed, lower this penalty in a bid to keep Pelephone’s interest.

Israel, HOT Mobile, Internet Gold (012 Smile Communications), Ministry of Communications, Pelephone