This maneuver appears repetitive, but Michael Golan uses it every time, proving how good he is at using the media to shake up the market and attract a lot of attention. Today's announcement that Golan Telecom Ltd. is for sale is actually nothing new.
A month ago, it was reported exclusively in "Globes" that the Rothschild investment bank was again trying to offer Golan Telecom for sale, and again hinting that it was also willing to consider an acquisition of one of the companies. This trick was already received with suspicion at the time, and achieved no results. Now Golan is going a step further by issuing an official announcement as part of the game, and trying to send out conflicting messages. Golan is speaking with Prime Minister and Minister of Communications Benjamin Netanyahu through newspaper stories, as it were.
By the way, it could be that Golan has really reached the conclusion that after obtaining 850,000 subscribers, it is time to make an exit and get out. That is legitimate. On the other hand, it increasingly appears that he is doing this in order to obtain concessions from the Ministry of Communications by threatening to leave the market. For the first time in his short history, Golan is encountering the Ministry of Communications in an unfamiliar situation: he is trying to convince people for the nth time that he is Robin Hood, and should receive help in defeating the wicked.
The concessions Golan is seeking are a blind eye to the contract he closed with Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) enabling him to evade the duty to invest in the deployment of a network. His agreement with Cellcom is so generous that he has to do everything he can to force Netanyahu to talk with him and give way to him. Golan is telling him, "The people are on my side - if you want me to continue making a reform in the market, you have to help me by turning a blind eye to my agreement with Cellcom."
Jokes aside, this really is Golan's method: to force the Israeli regulator to fall in line with his interest, so that he can obtained more concessions.
Here, however, Golan is putting his entire stake on one throw of the dice. He is on a collision course with Ministry of Communications director general Shlomo Filber, who is unwilling to play his game. Filber realizes that it is impossible to play along any longer with Golan's bag of tricks, in which the Ministry of Communications pretends not to see the abuses committed by Golan and others just because somebody might dare to say that it is nurturing tycoons in the market gain. He cannot get away with it anymore.
Filber does not want Golan to abandon the market, but he also knows that the current situation, with six cellular operators, is simply economically irrational, and is causing the market enormous damage. So Golan has run into a brick wall in the person of Filber telling him, "The gay times are over. It's time to invest real money, and to be the owner of half of a cellular network, without any clever maneuvers or underhanded tricks." Golan has to improve his technique for gaining the support of the masses, so he is releasing to the media a statement about plans to sell, to buy, or to continue the existing situation. In other words, he is saying, "Save me from my impetuous self." Yes, Golan could write a textbook on how to do this, but he's starting to sound like a one-note Charlie.
Published by Globes [online], Israel business news - www.globes-online.com - on August 26, 2015
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