Cellcom Drops as Discount Plans to Sell Shares: Tel Aviv Mover
Shares of the Netanya, Israel-based Cellcom dropped 1.8 percent to 27.78 shekels, or the equivalent of $7.52, at 1:11 p.m. in Tel Aviv, the lowest level since Jan. 31. Cellcom’s New York traded shares fell to $7.5 Feb. 8. The TA-25 benchmark index advanced 0.6 percent.
Discount Investment said Feb. 7 it plans to sell as much as a 1.9 percent stake in Cellcom for 55 million shekels ($15 million), according to a filing to the Tel-Aviv Stock Exchange. Discount holds a 43.6 percent stake in Cellcom. Discount Investment is owned by Nochi Dankner’s IDB Holding Corp., which has been selling assets to avoid defaulting on 2 billion shekels of debt.
“When investors know there is a 1.9 percent block of shares coming onto the market they prefer to wait for the sale,” said Sharon Naveh, head of institutional and international sales at Migdal Capital Markets Ltd. “That’s what is putting pressure on the shares.”
Cellcom, as well as competitors Partner Communications Co. and Bezeq Israeli Telecommunication Corp., have grappled with strengthening competition as new entrants Hot Telecommunication System Ltd. and Golan Telecom Ltd. cut prices for mobile services. Cellcom shares have declined 51 percent in the past 12 months, making them the worst performing stock on the TA-25 index, followed by followed by Partner and Bezeq.
Cellcom’s fourth-quarter earnings before interest, taxes, depreciation and amortization probably reached between 360 million shekels and 375 million shekels, the company said Feb. 7, missing the 413 million-shekel mean of three analysts’ estimates compiled by Bloomberg. Revenue in the period will reach 1.37 billion shekels to 1.39 billion shekels, Cellcom said in a preliminary earnings statement Feb. 7. That was below the average 1.41 billion shekels projected by four analysts surveyed by Bloomberg.
Discount Investment shares advanced 1.2 percent to 12.17 shekels. IDB Holding dropped 0.9 percent to 10.24 shekels.
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