Ilan Ben-Dov, the controlling shareholder of Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) intends to notify Hutchison Whampoa Ltd. (HKSE: 0013) that its cancellation last week of the deal to acquire control of Partner's parent company, Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF), is illegal. Ben-Dov's aides told "Globes" today that the cancellation has cost the company heavily.
The sources doubt that Ben-Dov intends to launch a legal battle against Hutchison, but it is possible that the cancellation of the deal will ultimately result in a different deal that will enable Ben-Dov to repay Scailex's $300 million debt to Hutchison, as well as the heavy bond debt of Scailex and its parent company, Suny Electronics Ltd. (TASE: SUNY).
Hutchison cited three reasons for cancelling the deal: the deterioration in Partner's business results, a false presentation in Scailex's reports, and reasonable concern that Scailex and Suny's bondholders would reject the proposed transaction.
Sources close to the deal say that Hutchison's claim of a false presentation is groundless, that the deterioration in Partner's results was known in advance, and the concern about Scailex and Suny's bondholders was also known in advance, and that Hutchison was aware of the risk from the beginning. Ben-Dov has recently hired Adv. Ram Caspi and Yair Caspi to advise him about Hutchison and the Scailex and Suny bondholders.
In the wake of the cancellation of the Scailex sale, it is now possible that some investors and investment institutions will return to the negotiating table with Ben-Dov.
Published by Globes [online], Israel business news - www.globes-online.com - on August 26, 2012
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