During the past two days, rumors again circulated of interest in Golan Telecom on the part of operators, and that Michael Golan is planning to sell the company. These rumors again say that Rothschild Investments is talking with operators and offering Golan Telecom for sale. Some of the operators confirm that they had been contacted, and some confirmed that they had heard the rumor.
Market sources expressed concern that these rumors were coming from Golan Telecom, which was using them to threaten to leave the local market, in view of the Ministry of Communications' demand that the company increase its investment in its joint network with Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL). These sources say that Golan Telecom realizes that the Ministry of Communications is not willing to give in to it this time, and has therefore switched to a different system - conducting negotiations in an attempt to show that it needs additional concessions from the Ministry of Communications; otherwise, it will be unable to remain an independent player in the market.
These rumors of interest in Golan Telecom on the part of the operators surface frequently, and there is no way to know what the next day will bring and what lies behind the various interests. What is clear is that someone is trying to take advantage of the cellular market situation and the uncertainty about the viability of mergers in the sector. The most amusing aspect of the story is the fact that everyone is talking about the Ministry of Finance's willingness to consider a reduction in the number of players, although the Ministry of Communications has not said this, and even had it said this, it would be meaningless, because the party calling the shots is the Antitrust Authority. The chances that the Antitrust Authority will approve a merger in the market between the major players, including Golan Telecom and HOT Mobile Ltd., are zero, because no player is facing collapse, and competition is at a peak. Anyone who thinks that the Antitrust Authority will agree to mergers at this stage, when the consumers are benefiting from the results of competition and lower prices, is therefore probably wrong. Mergers in the market are possible only after someone falls, i.e. collapses, and it is proven that that party cannot continue without a merger. Even then, it cannot be ruled out that the Antitrust Authority will do everything it can to prevent a merger with a part within the sector, and will prefer to bring in an external party. These expectations and rumors will pervade the market for a long time, but should be regarded with a healthy dose of skepticism.
Published by Globes [online], Israel business news - www.globes-online.com - on July 22, 2015
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