The Competition Authority approved: Gabay and Rodev group will acquire Partner for $ 300 million

The Competition Authority approved the transaction for the acquisition of control of Partner by the Gabay, Rodev and Phoenix Groups. This removed another obstacle although expected to complete the transaction.
Avi Gabay, Shlomo Rodev, Phoenix, Menora and Mori Arkin buy 27% of the communications company Partner from Hong Kong Hutchison for $ 300 million.
The group is now waiting for a permit from the Ministry of Communications to complete the move. The estimates in the capital market are that the group will not have difficulty obtaining the permit from the Ministry of Communications and thus Partner will officially transfer to the group's control.
As mentioned, Avi Gabay surprisingly resigned from his position as CEO of Cellcom in order to form a group of investors with Shlomo Rodev, which will acquire 27% of a partner owned by Hutchison and for $ 300 million, ie at a company value of just over $ 1 billion.
Rodev-Gabay's group also includes businessman Murray Arkin and Menora Insurance Company. Hutchison's shares were in fact owned by businessman Haim Saban who purchased them from her on a non-recourse loan. Saban decided not to pay the loan and so the shares were returned to Hutchison who did not receive permission to hold control of an Israeli communications company.
Hutchison transferred the shares to a trustee who was supposed to be looking for a buyer for her. At the end of the day, the trustee found a buyer in the form of Avi Gabay who retired from politics after a brief episode and moved on to run the competitor Cellcom.

The deal will transfer control of Partner into the hands of Rodev, Gabay, and four institutional entities: the Phoenix that was the living spirit behind the deal, Clal Insurance, Menora and the Arkin Group of Arkin teachers.

The group will pay $ 300 million, with Gabay and Rodev holding 10% of the shares acquired and receiving institutional funding for 80% -90% of the consideration.

Cellcom CEO Avi Gabay announced at the beginning of the week his resignation to the company's chairman Doron Cohen. This is what the company reported to the stock exchange this morning (Sunday). "According to the company's announcement, a date has not yet been set for the end of his term.
Following the announcement, Gabay commented on his resignation in a press release: "Cellcom is an excellent company and with the hard work of all its parts, employees, management, and board of directors, we have recently managed to get back on track for investment and profitability.

It was estimated that the reason for the resignation lies in the fact that Gabay and former Bezeq chairman Shlomo Rodev are conducting advanced contacts together with the Arkin group of Mori Arkin to acquire control of Partner. Partner shares are responding to the announcement with a sharp 7% increase.
The company's chairman Doron Cohen added: "In the last two years, Avi Gabay has brought about a huge change in Cellcom, which includes first and foremost laying the foundation for the company's relationship with its customers and improving the company at all levels and financial results. The change was laid on three foundations: building trust between the company and customers, building a relationship of partnership between management and the board of directors and employee and employee representation, and a massive improvement in the company's infrastructure. "Cellcom has a strong and stable management, which will continue to maintain stability and growth in the interim and in the future."
Gabay, former chairman of the Labor Party and Minister of Environmental Protection on behalf of the All of Us party, was appointed CEO of Cellcom about two years ago. Gabay previously served as Bezeq's CEO from 2008-2013, and after his retirement he turned to political life. After Nahal discriminated in the elections two years ago, he left politics.
Cellcom is traded on the stock exchange at a market value of NIS 2.3 billion and in the first nine months of 2021 recorded a profit of NIS 6 million on revenues of NIS 3 billion. This profit comes after three years of loss in this figure - in the calculation of the first nine months of the year. In a quarterly calculation, Cellcom recorded a profit in the last quarter it reported - the third quarter of 2021, as well as the first quarter of the year.
Gabay's entry into the position of CEO of the company was accompanied by high expectations, certainly of those who appointed him to the position. During his time, Bezeq's profitability rates were among the highest in the economy. But that was just a moment before the communications revolution that rocked the market, when Cellcom and Partner were only "cellular operators" and not "communications groups" competing, when a landline phone could only be obtained at Bezeq, and when the threat of fiber optic competition came only from the IEC venture.
Seven years later, Gabay has reached a group that is in the worst crisis in its history: with a dramatic drop in revenues in the competitive cellular field and with the necessity of painful cuts including the dismissal of 600-700 employees. He came to a company that had no choice but to embark on new and demanding areas of activity, which also do not generate sufficient revenue, such as television, the Internet and optical infrastructure. In the past year, as mentioned, the company recorded a profit.