IDB Chairman Nochi Dankner
Photo: Vardi Kahana
IDB buys NIS 30M in Cellcom stock
Nochi Dankner's group increases its holdings in telecommunications company to 46% through Discount Investments, plans to continue buying share
The IDB Group is capitalizing on recent declines in Cellcom's shares to increase its holdings in the telecommunications company.
Calcalist has learned that in the past few days, IDB subsidiary Discount Investments acquired over NIS 30 million (about $8 million) in Cellcom shares, mostly on the New York Stock Exchange.
2011 Review
Leroy Peri, Calcalist
This year gradually becoming IDB's worst under Dankner, who is set to sign, for first time ever, on a Q3 equity capital deficit
The latest reports attribute a 46.73% stake in Cellcom to Discount Investments at a value of NIS 2.95 billion ($780 million).
The stock purchase comes at the same time IDB subsidiaries IDB Development, Discount Investments, Koor Industries and Clal Industries are buying back debt from bondholders.
Discount Investments is expected to continue buying the cellular company's stock. Since Cellcom is cross listed in Israel and the United States, its parties at interest are not obligated to immediately report any increase or decrease of their stake in the company.
Cellcom's stock recorded a 40% plummet since the beginning of the year on the backdrop of regulatory reforms, which led to steep declines in cellular connectivity fees and other earnings of Cellcom, as the well as the increased competition with rivals Partner and Pelephone and the upcoming entrance of new players Mirs and Golan Telecom into the local cellular market.
Cellcom posted steep declines in its third quarter results with net earnings tumbling 40% as compared to the same quarter last year to NIS 199 million ($53 million); 4% were shaved off the company's revenue which was NIS 1.6 billion ($420 million); operational profits shed 35% to NIS 349 million ($92 million) and the EBITDA is down 25% to NIS 534 million ($141 million).
Cellcom's equity shrunk to NIS 288 million ($76 million), and similarly to its competitors – the company is poised to lay off hundreds of employees in the upcoming months.
IDB, controlled by Nochi Dankner, advised the Stock Exchange of its intention to reduce Maariv daily newspaper's debt by publishing a full tender offer for Maariv's bonds at 84 agorot (22 cents) per bond which is a 65% premium over its market price.
Click here to read this report in Hebrew
