Ilan Ben-Dov has taken another blow today, with the loss of the bulk of his franchise, held by Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF), to import mobile devices of Samsung Electronics Co. Ltd. (KSX: 5930; LSE: SMSN). This business was the springboard for Ben-Dov's leap to the top of the Israeli business world.
In a notice to the Tel Aviv Stock Exchange (TASE) today, Scailex today lifted the veil about the franchise, which it has held since 1999. Although the franchise, which expires at the of 2014, was extended for six years through 2020, instead of the previous one-year extensions, Samsung, through Samsung Israel Ltd., will sell handsets directly to Israeli carriers, limiting Scailex's franchise to sales to private mobile networks and wholesalers.
From mid-March Samsung Israel Ltd. will sell new products launched in the country, including the Galaxy S5, directly to carriers, rather than through Scailex.
Only an estimated 30% of mobile phone sales in Israel are sold through these channels, which means that Scailex, which has already announced that it plans to spin-off the franchise and float it on the TASE, will lose most of its business. The spin-off and IPO are off the table because of the Business Concentration Law, and Scailex may seek partners or investors for the franchise.
Published by Globes [online], Israel business news - www.globes-online.com - on February 25, 2014
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