ECI Telecom Controlling Shareholders Are Negotiating the Company's Sale

Rumors that Nortel is the buyer were denied; ADC has also been mentioned

The controlling shareholders of ECI Telecom (Nasdaq: ECIL) are negotiating to sell the company, sources near the talks confirmed today.

The sources said the negotiations were at an "intermediate" stage: it is possible no deal will be done.

No details could be obtained about the potential buyer, but rumors have been circulating for weeks that a global telecommunications has been sniffing.

Reports that the potential buyer is Nortel Networks were denied. ADC Communications was also mentioned.

ECI is controlled by Koor Industries (NYSE: KOR) (30%), Clal Industries and Investments (TASE: CII) (14%), Ofer Hi-Tech (6%) and the Carmel investment fund (3%).

Koor and Clal both belong to Nochi Dankner's IDB (TASE: IDBH) group.

In March 201, when ECI (then controlled by Koor) was in trouble as the hi-tech crash brought telecoms capex grinding to a halt, a group headed by Shlomo Dovrat bought holdings in the company and orchestrated a turnaround. The result was that Koor's value tripled.

The group of investors included Aharon and Shlomo Dovrat, Avi Zeevi and Harel Beit-On, and Ofer Hi-Tech. They invested $50 million in ECI for 12.5% of its shares. The group is now expected to join Clal Industries in exiting their investment.

An ECI spokeswoman said that the company does not comment on rumors.