Partners again; Hutchison Whampoa returns to Israel with Scailex stake acquisition

8 Jun 2012

Having sold its holding in Israeli mobile network operator Partner Communications less than three years ago, Hutchison Whampoa is reportedly set to pay USD125 million for 75% of Israeli handset distributor Scailex Corp, which currently holds a 44.5% stake in the cellco. According to Bloomberg, Hutchison Whampoa will acquire the stake from Suny Electronic Ltd, which will retain a 3.6% holding in Scailex, while under the terms of the deal, which is subject to regulatory and other approvals, Scailex will be required to buy back 50% of its bonds. The agreement will also see Suny acquire the import and marketing operations of Samsung cellular products from Scailex for USD100 million. Commenting on the development, Dan Eldar, a representative of Hutchison based in Israel, noted that Partner was ‘not a cheap buy’, but said that it was premature to discuss business strategies for the company.

As noted in TeleGeography’s Database, in July 2009 Hutchison Whampoa called on potential buyers for its majority stake (51.2%) in Partner to submit bids by 8 July 2009. Subsequently, in August that year Scailex agreed to acquire the holding for USD1.38 billion, or USD17.50 per share. Having obtained regulatory approval, the deal was closed in October 2009, in parallel to which, and as a result of various subsequent deals, Scailex’s stake in Partner was reduced to 44.92%. With Scailex’s stake having since fallen to 44.5%, at the end of 2011 the cellco’s other notable shareholders included Leumi Partners Ltd (4.99%) and Suny Electronics (1.4%), while 3.25% of Partner shares were held by Israeli entities, as required by its license granted which stipulates that at least 5% of the operator’s shares be held by founding shareholders who are Israeli entities or their approved substitutes. The remainder is held by the public.

Israel, CK Hutchison, Partner Communications Company