Elbit, Matav dismantling Matbit alliance
Matav Cable Systems (Nasdaq:MATV) and Elbit (Nasdaq:ELBT) are dismantling their Matbit Telecommunications Systems partnership, TheMarker has learned.
Matbit owned 24.8% in cellular provider Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD). After Matav decided to sell 7.7% of its holdings in Matav to Hutchison-Whampoa, Matav and Elbit could have agreed on a structural change in the ownership of Matbit, but preferred to dismantle the company.
Matav owned 2.8% in Partnerthrough Matav Investments, a stake it sold to Hutchison-Whampoa. Matav owned 12.4% in Partner through Matbit, of which it sold 4.9% to Hutchison-Whampoa.
Matbit was established in order to create a screen between Elbit-Matav and Partner. Closing Matbit will allow Elbit to offset $40 million for the purpose of tax, on any future sale of Partner shares.
Matav CFO Shalom Bronshtein told TheMarker that some capital gains from the sale of Partner shares will be taxed by 36%.
He added that the sale serves Matav in terms of cash flow and financially. He said that Matav received a premium on the market price. Bronshtein said that future sale of Partner shares will depend on Matav's needs.
