The acquisition of Israeli mobile operator Golan Telecom Ltd. by Electra Consumer Products Ltd. (TASE:ECP) is in trouble a few short steps before its completion. Sources inform "Globes" that Electra Consumer has been trying to put the price down in recent days, but the Golan Telecom shareholders are strongly opposing this. Some say that this is no more than a show aimed at improving the terms at the last moment.
As previously reported in "Globes" the deal was hanging in the balance even before going to the regulators for approval, and it now appears that the current crisis is liable to put an end to it.
The Israel Antitrust Authority director general and the Ministry of Communications recently approved the deal, which was apparently set to be closed within a few days. It now turns out that Electra Consumer has been making further demands in recent days that would reduce the price it is willing to pay for the company. The Golan Telecom shareholders have responded that this is unacceptable to them, and are demanding that Electra Consumer stand by the original terms for the deal.
All of the concerns that expressed interest in acquiring Golan Telecom said that the viability of the deal at this price was extremely marginal, but the loan that Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) granted the buyers slightly improved the acquisition terms. This was probably what led Electra Consumer to give its initial agreement. Under the original terms for the deal, Electra Consumer is to pay NIS 350 million for Golan Telecom.
The fate of the deal, and whether the voices of dispute are nothing but a show by the parties, or reflect dissatisfaction with the terms of the deal, will become clear in the coming days.
Electra Consumer declined to respond to the report.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 2, 2017
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