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(photo credit: Courtesy Photo)
Discount Investment Corporation, controlled by Nochi Dankner, agreed Sunday to divest a 5 percent stake in Cellcom to US investment house Goldman Sachs for about $100 million, in the first deal resulting from the mobile phone provider's efforts to find new investors.
"The entry of Goldman Sachs into Cellcom shows the great faith and confidence that this international body has in the Israeli economy," said Dankner, who holds 94.5% of Cellcom through Discount. "The investment of Goldman Sachs will open the door to international markets and new opportunities to invest in the communications sector outside of Israel."
The IDB group said the deal was poised be the first of a series of cooperative ventures between the two parties.
The acquisition values the entire Cellcom company at $2.07 billion, adjusted for past and future dividends until the deal is closed.
Upon completion of the deal, expected within the first quarter of this year, Discount will post a NIS 112m. capital gain in connection with the sale.
Under terms of the deal, privately-held Cellcom is to go public within the next three years. Further, both parties agreed that Cellcom would adopt a policy of distributing at least 75% of its after-tax profit in the form of dividends to shareholders, subject to cash needs or other plans approved by the board of directors.
As reported previously, the IDB group has been seeking to attract two to three investors into Cellcom, who would each be given the option to acquire between 10% to 15% of the company but no more than 30%. Markstone Capital Group LLC, a private equity fund headed by Ron Lubash and Amir Kess and Providence have both been touted as potential contenders for Cellcom.
In January, Cellcom paid out a NIS 1.7b. dividend to help pay back over half the $600m. loan Discount took in September for the $1.3b. acquisition of an additional 69.5% of Cellcom, which boosted its stake in the company to 94.5%.
Ever since, Dankner withdrew from purchasing the government's controlling stake in Bezeq, after the Antitrust Authority required him to sell his shares in Cellcom, he has been focusing on building a global telecommunications group vis-a-vis Bezeq.
IDB also has majority control of long-distance and Internet provider NetVision and complete ownership of communications company Globcall.