Leumi Partners Ltd., the investment arm of Bank Leumi (TASE: LUMI), is also considering the sale of its shares in Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), if Ilan Ben Dov-controlled Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF) finds a buyer for the block of shares that it is offering. Leumi Partners owns 5% of Partner.
In yesterday's notice to the TASE, Scailex said that it was considering the sale of part of its 44.54% stake in Partner "at a substantially higher price than the market price". The announcement came after Partner's share price fell 50% this year, and two months after "Globes" was the first to report that Ben Dov wants to sell 15% of Partner to a foreign investor.
Scailex said it decided to seek a buyer for part of its Partner shares because of the interest shown by foreign private equity funds. The announcement was influenced by France Telecom SA's (Euronext: FTE; NYSE: FT) sale of Orange Switzerland to Apax Partners. Scailex and Leumi Partners apparently liked the price of that deal and the multiples at which it was made, and concluded that private equity funds are seeking sound investments in the mobile market. This provides sufficient incentive for the sale of Partner shares.
France Telecom announced the sale of Orange Switzerland on Friday for €1.6 billion ($2.1 billion), reflecting a multiple of 6.5 on the latter's projected earnings before interest, taxes, depreciation and amortization (EBITDA) for 2011. This is higher than the average 5.6 EBITDA of Western European mobile carriers for the past three years.
A capital market source told "Globes" that the pricing of the Orange Switzerland sale reflects a share price of NIS 85 for Partner - 156% above its current price.
One of the private equity funds interested in Scailex's Partner shares is TPG Capital LP (formerly Texas Pacific Group), which manages tens of billions of dollars. Its wide-ranging investments include retail, telecommunications, and financial services.
Partner's share price rose 5% in morning trading on the TASE today to NIS 34.56, after remaining unchanged on Nasdaq on Friday at $8.63, giving a market cap of $1.34 billion. Scailex's share price rose 5.3% on the TASE to NIS 16.81, giving a market cap of NIS 446 million.
Published by Globes [online], Israel business news - www.globes-online.com - on December 26, 2011
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