Israeli Prime Minister Benjamin Netanyahu has suggested that he will not give his approval for the proposed acquisition of mobile network operator Golan Telecom by larger rival Cellcom, Haaretz reports, citing comments made in a local news broadcast. With the PM currently also holding the role of minister of communications, Netanyahu’s approval is required for the deal to move forward, but industry sources have claimed he is dissatisfied with the planned merger.
As previously reported by CommsUpdate, earlier this month Cellcom announced that it had entered into an agreement with the shareholders of Golan Telecom for the purchase of a 100% stake in the company. Under the deal Cellcom will pay ILS1.17 billion (USD301.7 million) for the smaller company, with the purchase price representing an enterprise value (EV) of ILS1 billion for Golan and an EV/adjusted EBITDA multiple of approximately 5.0, based on Golan’s forecasted adjusted EBITDA for 2015 (ILS204 million). Cellcom intends to finance the purchase price through a combination of equity and debt, which may include a rights offering.