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Discount Investments, part of the Nochi Dankner controlled I.D.B. Group, continues attempts to expand its communications activities in Israel. Discount Investments has recently made an offer to purchase Motorola Israel's subsidiary, MIRS Communications.

The initial offer was relayed to the CEO of Motorola Inc. Edward Zander by CEO of Discount Investments, Ami Erel, during a meeting the two held in Hong Kong. Zander has not responded to the offer. According to market estimates, the value of MIRS is $250-300 million, and Motorola is undecided on whether to sell the subsidiary.

MIRS is the forth and smallest cellular company active in Israel. The company has about 400,000 subscribers, after 50,000 new IDF users were added a few months ago. MIRS estimates that revenue from the IDF tender over the optional three-year period granted to it will total NIS 140 million.

Discount Investments also owns the Cellcom cellular company, which is about to be issued in the U.S. at a valuation of $2 million, and which has about 2.8 million subscribers. The group's holdings in Israel include Netvision and Barak. It also intends to compete in the $500 million Lithuanian and Latvian BITE cellular network tender.

Motorola Israel has responded that they were unaware of the meeting, and that MIRS is not up for sale, nor had any discussion been held on its value.

Even if initial discussions ripen into a transaction, there is no assurance that it would be approved by the Anti-Trust Authority. It is clear that such a transaction would cut the number of players in the cellular market from four to three, thus reducing market competition. The question that the authority will be considering is whether substantial harm would be done to competition if the transaction is approved.