Discount in talks to sell 4% of Cellcom

Discount started the year off with a 25% share in Cellcom and now holds 94.5%.

December 14, 2005 07:26
1 minute read.
cellcom logo 88

cellcom logo 88. (photo credit: )

Rounding off a year in which Discount Investment Corp. spent over $1.3 billion buying up shares in Cellcom, Discount said Tuesday it was in negotiations to sell 4 percent of the cellular provider to Migdal Insurance and Financial Holdings Ltd. In a statement to the Tel Aviv Stock Exchange, Discount said the negotiations were being carried out based on a valuation for Cellcom of $2.1 billion, which would pin the deal at around $84 million for the 4% stake. In a separate statement, however, Migdal said it would pay $60m. for the stake. Nochi Dankner, who controls Discount via parent company IDB Holdings, this year bought out the Safra brothers and US telecommunications giant BellSouth, each of which had a 34.75% stake in Cellcom, thus boosting his efforts to turn Cellcom along with Discounts' other telecom subsidiaries into the main competitor of Bezeq, which was privatized in May. Discount started the year off with a 25% share in Cellcom and now holds 94.5%. Meanwhile Cellcom has been losing ground against its competitors, reporting just 35,000 new subscribers in the third quarter of the year, almost half of Partner and Pelephone. Separately, on Tuesday, Discount said it signed an agreement with Citigroup to receive a $500m. loan over a five-year period. This follows Monday's announcement that the company plans to raise NIS 500m. from institutional investors in a bond offering before the end of the year.

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