Read more in Calcalist:
As part of the deal, which was reached as part of a creditors’ arrangement at the company, Clearmark and Lerner will purchase two-thirds of the company for NIS 100 million, with NIS 65 million to be transferred to creditors. Hezi Bezalel, the current controlling shareholder in the company, will remain with a third of the shares.
1 View the gallery
Hezi Bezalel and Yariv Lerner
(Photos: Alex Kolomoisky, Sivan Farage)
As part of the approval of the transaction, the competition commissioner also approved the network sharing agreement between Marathon and Cellcom, signed between Clearmark and Lerner and Cellcom, but prohibited the companies from providing credit between the parties without receiving further approval at the time the credit was provided. Under the original agreement between the parties, it was stipulated that Clearmark and Lerner would be given an option to sell their shares in Expon to Cellcom for NIS 130 million in 3 to 5.5 years. If such a deal is not made possible due to the refusal of the regulators, it has been determined that Cellcom will provide Clearmark and Lerner with a loan of the same amount.
In recent weeks, as part of talks between the parties and the Competition Authority, it has been made clear to buyers that this clause will not be approved by the Authority, and the deal was even about to explode. In the last week, improvements have been made to the agreement that will allow the approval from the competition authority. The commissioner itself justified the ban on granting a loan on the grounds that the exercise of the loan option may in some cases cool the competition between Expon and Cellcom.
The new agreement between Marathon and Cellcom embodies many concessions on the part of Cellcom, including the reduction of Cellcom’s expected revenues from the agreement by at least 50%. In order to obtain the approval of the Competition Authority, Cellcom agreed that if the put option or loan could not be exercised, Cellcom would grant the marathon certain discounts in payments to the joint network, and would also allow it to shorten the network sharing agreement period from 10 years to only 7 years. Although the Competition Authority conditioned the granting of credit on further approval, it retained the clause that allows the marathon to oblige Cellcom to grant it discounts on additional payments.
At the same time, Cohen refrained from referring to a clause in the agreement that allows the new owners to oblige Cellcom to purchase their shares in a future marathon, despite the fact that such a deal would reduce the number of players in the communications market. Although this section requires additional approval from the Commissioner when deciding on the exercise of the option, it leaves an opening for harm to competition, if exercised and approved.