Bank Leumi decided last week to buy 4.99% of Partner Communications, Israel's biggest cellular telecommunications provider, for NIS 515 million. Leumi's acquisition is part of Ilan Ben-Dov's purchase of the controlling stake in the cellular services company from Hutchison Telecommunications, a Chinese company. Ben-Dov will thus be left with 46% of Partner, rather than the 51% enumerated in the NIS 5.3 billion agreement signed the week before last.
Ben-Dov would apparently like to sell up to 15% of Partner, and retain 36%. Mizrahi-Tefahot Bank is likely to buy a stake in the company, too.
In addition to their investment in Partner, Leumi and Mizrahi-Tefahot are expected to finance Ben-Dov's acquisition of the company. If Ben-Dov sells 15% of Partner, the banks will be financing about 30% of the deal, with Leumi providing 65% of the financing and Mizrahi-Tefahot the remaining 35%.
Scailex, the company Ben-Dov plans to use for the purchase of the controlling stake in Partner, will pay Leumi Partners about $3 million for brokering the deal for Bank Leumi.
Leumi will appoint a director to sit on Partner's board and will have veto rights on fundamental decisions at the company, such as reorganization, changes in business model, issuing shares, allocating bonuses, and so forth.
Leumi's purchase of Partner shares will come with an option to buy NIS 103 million in convertible bonds issued by Scailex. 87% of the Scailex shares owned by Ben-Dov's Suny Electronics serve as security for loans from Mizrahi-Tefahot.
Other investment groups interested in buying a stake in Partner include the Clal and Migdal insurance companies. Clal belongs to Nochi Dankner's IDB group, which is the controlling shareholder in Partner rival Cellcom Communications. Last week the Menora Mivtachim insurance group and Shlomo Nehama, who had been considering joining the deal, decided against the investment.
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