30 Oct 2015
Discussions over the possible merger of Israeli operators Golan Telecom and HOT Mobile are underway, reports Haaretz. HOT’s parent company, Altice Group, is conducting talks in France with Xavier Niel, who holds a 30% stake in Golan Telecom, making him the latter company’s second largest shareholder after Michael Golan. A tie-up of the two companies would earn the combined entity just over two million mobile subscribers, meaning it would still trail the market’s largest operators Cellcom, Partner Communications and Pelephone. As such, it has been suggested that the merger would stand a better chance of gaining antitrust approval than if one of the three aforementioned cellcos made a play for Golan Telecom.
Golan’s sale price is said to involve several as yet unsettled factors, with Haaretz claiming ‘companies like it typically are sold at six times their EBITDA’; this would value the operator at around ILS480 million (USD124 million). It noted, however, that there could be synergies and cost savings from the merger that could add 15% to Golan’s value.
As previously reported by CommsUpdate, in August 2015 shareholders in Golan Telecom were said to have hired an investment bank to explore a number of options, including putting the company up for sale. Earlier this week, meanwhile, Israeli government officials reportedly indicated they would likely oppose a merger between mobile network operator Golan Telecom and a competitor over fears such a move could impact competition in the sector. At the same time Shlomo Filber, director general of Israel’s Ministry of Communications (MoC), actually voiced support for consolidation in a separate interview, saying: ‘I don’t see a problem with Cellcom, Partner or Bezeq buying Golan if they want … The market will continue to be competitive even with four main players and other niche players, with rational prices that will enable reasonable profitability and infrastructure investment.’