Sources inform ''Globes'' that Walt Disney Co. (NYSE: DIS) investment arm Shamrock Holdings wants to acquire, or invest in, MIRS Communications Ltd. and is in preliminary talks with MIRS' owner, Motorola Inc. (NYSE: MOT) to this effect. MIRS is Israel's fourth cellular network operator.
Financially troubled Motorola decided to put MIRS up for sale because it cannot survive without a substantial capital injection. Motorola is seeking a deal at a company value of $300 million for MIRS, which is considered a high price. Motorola has hired Merrill Lynch to value MIRS for a deal.
MIRS is facing a technologically uncertain future. The company had planned to set up a nationwide mobile WiMAX network, but the technology has not been able to compete against current 3G networks or future 4G LTE technology. MIRS therefore opted to set up a 3.5G HSPA network, and had planned to bid in the Ministry of Communications tender for the necessary frequencies. However, Motorola does not want to make this investment, and is therefore seeking either a partner for MIRS, or to sell the company.
MIRS also believes that its best option is a new investor, because ownship by Motorola raises conflicts of interest. Motorola is a manufacturer of cellular equipment, which it sells to MIRS.
A spokesperson for the Shamrock group said that it was not the group's practice to respond in any way to rumors, and that it would therefore not comment on the matter. Motorola's spokesperson said that the company did not respond to rumors and speculation.
Published by Globes [online], Israel business news - www.globes-online.com - on June 7, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009