Another bidder emerges for Xfone, as arrangement manager recommends Widely Mobile’s offer

3 Sep 2021

Following confirmed bids for Israeli mobile network operator (MNO) 018 Xfone from rivals Cellcom – via its Golan Telecom subsidiary – and Partner Communications earlier this month, Globes reported earlier this week that another offer could be forthcoming. According to the local press outlet, a fresh bid for Xfone was expected from a consortium led by former Pelephone CEO Itzik Ben-Eliezer and funded by Israeli businessman Mordechai (Moti).

Now, according to a financial filing made by Cellcom, it would appear this offer has indeed been made. In issuing an update related to its proposed acquisition of Xfone on 1 September, Cellcom revealed it had reached agreements to modify the terms of its sharing and usage agreement with Xfone (the ‘Principles Agreement’) with a corporation (in establishment) controlled by Moti Ben Moshe that was confirmed to have submitted both an offer to purchase Xfone and an arrangement with its creditors. It was noted that the modifications to the sharing and usage agreement included, among other things, Xfone undertaking to ‘obtain an amended licence from the Ministry of Communications (MOC) and the allocation of frequencies by virtue of the last frequency tender and the payment of the licence and frequency fees to the MOC, the extension of the sharing and usage agreement validity for ten years from the date of receipt of the above mentioned approvals’.

However, that same day also saw Cellcom issue a further update regarding Xfone’s purchase under insolvency procedures, in which it revealed that Xfone’s arrangement manager had submitted a report to Israel’s insolvency court in which he recommended both the approval of the sale of Xfone’s activity to Widely Mobile and the debt settlement proposed by Xfone based on the purchase agreement with Widely. For its part, Cellcom said it was ‘of the opinion that the recommendation of the arrangement manager is wrong and intends to vigorously object to that debt settlement at the court’.

Shmaya Reichman’s Widely Mobile is understood to have lodged its bid for Xfone back in June 2021, and according to Globes, Reichman – who along with Yehoshua Teichman founded local B2B provider/MVNO Free Telecom (x2one) – is seeking to turn Xfone into an MVNO operating over the Pelephone network.

Israel, 018 Xfone (We4G), Cellcom