Israel’s Partner Communications has made a bid for Marathon (018) Xfone, offering ILS187 million (USD58 million) for the ‘business activity’ of its smaller rival, subject to a purchase price adjustment mechanism which stipulates that the purchase price will be reduced ‘in certain cases where there is a significant gap between Marathon’s presentations and the purchase that will actually be purchased by Partner’. Meanwhile, Partner’s bid – which will expire on 9 September – offers to retain at least 70% of Marathon’s employees for at least one year from the date of the purchase, with Partner saying that its offer for Xfone is subject to a limited due diligence procedure requiring up to five working days.
Partner’s offer comes after Golan Telecom – now a wholly-owned subsidiary of Cellcom – lodged its own bid for Marathon (018) Xfone earlier this month. As per Golan’s bid, it said that it was seeking to purchase ‘100% of the issued and paid-up share capital of Xfone or its activity (as shall be decided in the future)’. Initially Golan’s bid offered to cover all debts to Xfone creditors, provided that the total payment did not exceed ILS60 million, while the purchase would also include Golan taking over all of Xfone’s debt owed to Cellcom. A week after making its initial bid announcement, however, Cellcom announced that Golan had submitted an updated offer ‘per the Xfone arrangement manager’s request’, which included updating the total sum to be paid to Xfone’s creditors to up to ILS65 million. Meanwhile, other notable elements of Golan’s bid include: an offer to provide Xfone with interim financing of up to ILS3 million per month for a period of up to three months while awaiting regulatory approval for the deal, by reducing the consideration that Xfone has to pay Cellcom under the pair’s network sharing agreement; and an offer to retain Xfone’s employees for a period of at least two years.