Internet Gold Buying 60% of 012-Golden Lines From Eliezer Fishman

Sources say the sale for $80 million isn't related to Fishman's losses on the Turkish lira

Internet Gold (Nasdaq: IGLD) is buying the 60% control and equity in 012 Golden Lines from Eliezer Fishman for $80 million. The deal values Golden Lines at $140 million.

Trade in Internet Gold stock had been suspended on Sunday morning in anticipation of a substantial announcement, which turned out to be the acquisition.

The price that Fishman obtained from Internet Gold, which is controlled by Shaul Elovitch, is 10% above the price he had been negotiating with Israel Cold Storage & Supply Co (TASE: CDSS).

Storage, controlled by Ron Gat and Shlomo Rodav, proposed to buy a 50% controlling interest in Internet Gold for NIS 290 million.

After the deal with Internet Gold, Fishman - who has been divesting assets to repay massive losses on speculating in the Turkish lira - will still own 38% of Golden Lines. But the talks on the deal had lasted three months, well before the Turkish lira plunged, and sources near Elovitch say the selloff has nothing to do with Fishman's losses.

Detailed agreement shall be signed by the parties within the coming days and will be subject to the approval of the boards of directors and the relevant regulatory authorities, Golden Lines said.

The company added that following the acquisition, Internet Gold will merge 012 with Smile.Communications, a wholly owned subsidiary. Like Golden Lines, Smile provides internet and international communications services.

Internet Gold has been involved in Internet since 1996.

It added that after the merger with Smile, the merged company will be have combined estimated revenues of NIS 1 billion and more than a third market share of Israel's Internet and long-distance communications market.

Following the completion of the merger, Eli Holtzman, CEO of Internet Gold, will continue to manage the mother company and also the subsidiary Smile.Media. The newly merged company of 012 and Smile.Communications will be managed by Stella Hendler, CEO of 012.