Cellular carrier Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) today reported that it has signed an agreement for NIS 1.54 billion to acquire Internet service provider and international call carrier NetVision Ltd. (TASE: NTSN). The price paid is in accordance with a company valuation of Netvision published this week.
The boards of directors of both companies have approved the merger. Both companies are controlled by Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH). Through IDB, Discount Investment Corporation (TASE: DISI) holds 48.3% of Cellcom and 38% of NetVision.
Above and beyond the NIS 1.5 billion, Cellcom will also pay NetVision 5% interest from April 1 2011, a short time after the initial reports of talks between the two companies, and the date on which the acquisition will be completed.
Discount-Investment reported, "On completion of the merger, Discount-Investment will receive NIS 585 million (not including interest) and record a capital gain of NIS 71 million. There is no certainty that the merger will be completed."
Discount-Investment's share price was down 2.1% on the TASE this morning to NIS 51.30. Cellcom's share price was up 0.2% to NIS 98 and closed at $28.76 on the NYSE last night, giving a market cap of $2.85 billion, and NetVision's share price was up 0.21% to NIS 46.78.
Published by Globes, Israel business news - www.globes-online.com - on June 16, 2011
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