David Tadmor, the former Antitrust Commissioner, is special advisor to Dankner Investment and Matav Cable Systems (Nasdaq:MATV) on the Matav-Yes deal. Tadmor left his position as Antitrust Commissioner about a year ago, and after a short cooling off period joined Ram Caspi¿s Caspi & Co., one of Israel's oldest law firms.

This morning it was published that Shmuel Dankner, the controlling shareholder in Matav, is offering the satellite company Yes a 22% stake in Matav. The deal according to Matav's market value is estimated at $50 million. The offer follows current Antitrust Commissioner Dror Strum's refusal to allow Bezeq to buy half of Matav's shares.

Dankner, Tadmor and Caspi met with Communications Minister Reuben Rivlin and his director-general to discuss the details of the new deal. Dankner said the deal with Yes was meant to be executed in case the cable company merger does not get approved, or if its terms of approval prove problematic for Matav. Dankner does not think the cable companies should commit to massive investments in telephony at a time they are hurting for cash.

In 2001 Matav made a request to merge with two other cable companies, Tevel and Golden Channels, and the planned cooperation with Yes is apparently an option in case the merger with the cable companies does not go through. The investment by the satellite company may give Matav a financial boost and up both companies buying power for content in Israel and abroad.

TheStreet Recommends

Matav has 300,000 subscribers and Yes about 260,000.

If approved, the deal would make it impossible for the other cable companies to offer telephony services in the future. It is therefore unlikely to be approved by the Communications Ministry, which hopes to encourage competition in the telephony sector. Strum asked Dankner for more details regarding the company's plans, since he feels it is not reasonable for one company to seek the approval of two contradictory business plans.

Dankner has announced in the past that he was considering joining a group that would offer to buy Bezeq as part of the move to privatize the company. Bezeq currently has a 45% stake in Yes, and Bezeq CEO Ilan Biran is Dankner's principle partner in negotiations of the deal.