As reported in "Globes" on Thursday, Pelephone has filed a conditional bid to buy Golan Telecom. This is according to a notice to the Tel Aviv Stock Exchange today by Pelephone's parent company Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ).
It is believed in the telecommunications market that Hot Telecommunication Systems Ltd. (TASE: HOT) will also make a bid, but the company is staying silent and refusing to confirm or deny this. Nevertheless, the fact that Hot submitted an offer at the preliminary stage for non-binding bids a few weeks ago indicates that the chances are that it will enter the bidding. Hot stands the best chance of obtaining regulatory approval for buying Golan Telecom, and that will probably be one of its main considerations. The chances of veteran players Pelephone or Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) obtaining approval are very low.
As far as the players in the mobile telephony market are concerned, buying Golan Telecom now could give them a large advantage in the future, for several reasons. The first is that if one of the companies is allowed to buy Golan Telecom, it will be very unlikely that any of the players will be allowed to buy one of the others in the future. That is to say, whoever buys Golan Telecom now cuts the number of players in the market to four, which could be a tolerable number for the Anti-trust Authority. After that, it is not likely that a merger reducing the number of players to three will be allowed. That makes it worthwhile for one of the companies to try to buy Golan Telecom now, because afterwards it will be too late.
Published by Globes [online], Israel business news - www.globes-online.com - on November 1, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015