IDB Holding Corp. Ltd. (TASE:IDBH) subsidiaries mobile carrier Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and NetVision Ltd. (TASE: NTSN) today notified the TASE that they are in merger talks.
Cellcom has previously reported that it was conducting preliminary studies on a merger with NetVision, a provider of international calls carrier, telephony, and Internet services. Recent regulatory changes allow a mobile carrier to own an international calls carrier through structural separation, or, under certain conditions, without it. In view of these changes, Cellcom yesterday approached NetVision with an offer for a subsidiary to open merger talks with NetVision.
Cellcom is offering to buy NetVision for NIS 1.5 billion in cash, at NIS 47.47 per share, a 9.9% premium on today's opening price of NIS 43.17. The offer is subject to the usual kind of adjustments. If the offer is accepted, NetVision will become a wholly owned subsidiary of Cellcom.
If a deal is reached, the closing will be subject to approval by a majority of the public shareholders of both companies, approval of the companies' controlling shareholder, approval of the Ministry of Communications, the Antitrust Authority, and other regulators, and other conditions.
NetVision has not yet responded to Cellcom's offer, and there is no assurance that a deal will be closed. Cellcom said that if a final deal is reached, it will finance all or part of the acquisition through a new debt offering.
Cellcom's share price closed at $31.53 in New York yesterday, giving a market cap of $3.12 billion. The share price rose 0.6% in morning trading on the TASE today to NIS 110.10, and NetVision's share price rose 8.3% to NIS 46.72, giving a market cap of NIS 1.31 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2011
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