Hutchison Whampoa to buy back control of Partner Comm

TEL AVIV Tue Jun 5, 2012 3:59am EDT

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TEL AVIV (Reuters) - Hutchison Whampoa (0013.HK) of Hong Kong agreed to acquire a 75 percent stake in Scailex (SCIX.TA), the parent of Israeli mobile phone operator Partner Communications (PTNR.TA), for $125 million in cash, Scailex said on Tuesday.

Scailex's parent company Suny Electronic Inc (SUNY.TA), which is selling the 75 percent stake, had said on Sunday 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 $4.99 on Nasdaq on Monday.

That purchase price included $1.08 billion in cash and a $300 million secured loan to Scailex. As part of the latest agreement, Hutchison agreed to extend repayment of the loan by three years to April 2017, Scailex said in a statement.

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 1.3 percent to 19.1 shekels in morning trade in Tel Aviv. Scailex holds 44.54 percent of Partner's shares.

Debt-laden Scailex is the sole importer of Samsung (005930.KS) mobile handsets in Israel. Scailex said it would sell its Samsung import activities to Suny, which is controlled by Israeli businessman Ilan Ben-Dov, for $100 million.

Scailex also said it will offer to buy back at least 50 percent of its non-convertible bonds at 69 percent of their total value. The deal with Hutchison is conditional on the success of the bond buyback, it added.

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.

($1 = 3.89 shekels)

(Reporting by Tova Cohen; Editing by Hans-Juergen Peters)

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