Hutchison signs deal on Partner Communications
Just three years after selling its control in Partner Communications, Hutchison is taking back the reins – with last minute deal signed on Monday night
Calcalist has learned that Hutchison is back in control of Partner Communications just three years after selling it. The deal was signed late Monday night at the Hutchison Telecommunications' headquarters in Hong Kong.
Hutchison will pay Ilan Ben-Dov and his company Suny $125 million for 75% of shares in Scailex which has a controlling share in Partner. This after Calcalist had reported earlier in the week that there were some hiccups in negotiations.
According to the new agreement outline which was first revealed by Calcalist, Hutchison will purchase 75% of the Scailex shares from Suny, which is controlled by Ben-Dov and Suny will hold on to a mere 3% of Scailex. This means that Ben-Dov will completely lose his holdings in the company.
Moreover, Suny will purchase the import activities of Samsung from Scailex for $100 million. Thus pumping funds into the Suny purse enabling it pay its debts to debentures on time and even to purchase a portion of its debt back.
Earlier on Monday, before an agreement was reached, a Scailax statement said: "The company clarifies that negotiations are advanced and the company estimates an agreement will be signed in the coming hours."
"Until the start of trade tomorrow morning the company will report whether or not a deal has been signed."
Scailex's parent company Suny Electronic Inc (SUNY.TA) had said on Sunday that talks were taking place.
Hutchison sold a controlling stake in Partner (PTNR.O), Israel's second-largest mobile phone operator, to Scailex for $1.38 billion, or $17.50 a share, in 2009. That is well above Partner's closing price of $4.49 on Nasdaq on Friday.
The purchase price included $1.08 billion in cash and a secured debt instrument of $300 million.
Scailex had expected to finance the loan with dividend payments from Partner. But Partner, which has seen its profit fall sharply, last paid a dividend in the third quarter of 2011.
Shares in Partner were up 2.4 percent to 18.22 shekels in Monday morning trade in Tel Aviv.
Partner, which operates under the Orange brand name, and its rivals have come under pressure in the past year from increased competition and regulatory changes.
The government forced mobile operators to slash fees they charge each other to connect calls and to scrap exit fines for customers. The government also issued new licenses to create more competition and push prices down in a market dominated for more than 12 years by three groups.
Debt-laden Scailex is the sole importer of Samsung mobile handsets in Israel. Suny said it would acquire Scailex's import activities for Samsung phones in parallel to Hutchinson buying control of Scailex.
Scailex holds 44.54 percent of Partner's shares, worth 1.2 billion shekels ($308 million). Scailex and Suny are controlled by Israeli businessman Ilan Ben-Dov.
Reuters contributed to the report
