Ownership of the merged Matav/Yes entity (subject to valuations) would be divided among Dankner Investment (TASE: DKNR )(25%), Bezeq (TASE: BEZQ )(22.5%), Eurocom (15%), the rest of Matav's private shareholders (12.5%), the rest of Yes's private shareholders (12.5%), and the public invested in Matav (12.5%). This appears in Matav's notice to the stock exchange today.

The company would be a public company listed in both New York and Tel Aviv and would compete in the markets of multi-channel television and fast Internet.

At the beginning of January, Yes executives approached Matav concerning potential cooperation between the two companies. The idea was to merge Yes into Matav to create a large public broadcast company, under private control and with 650,000 subscribers.

Matav claims it would enter such a merger from a position of strength, 291,000 subscribers, 40% of whom are digital.

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The move would naturally require regulatory approval. Matav states in the announcement that one condition for such approval would probably be the need to ensure competition in multi-channel broadcasting in Matav-controlled areas by allowing Tevel and Golden Channels access to Matav infrastructure.

Current competition between Yes and the cable companies is based on Bezeq's desire to win the local telephony battle with the cable companies by massively funding Yes. If Matav/Yes were to come into being, Matav projects both Matav/Yes and a merged Tevel/Golden Channels could recover. This would enable real competition in the long term on the basis of financial and practical considerations in the multi channel television, fast Internet and local telephony markets.

The matter is still in very early stages. To date, only two meetings have been held between representatives of Matav and Yes. The entire matter is being undergoing due diligence and the chances of its actual implementation are quite slim, the announcement states.