Bezeq Gains on Lower-Cost Bets of Unit Merger: Tel Aviv Mover
Bezeq Israeli Telecommunication Corp. (BEZQ) advanced the most in more than a week on bets the acquisition of the outstanding stock of its satellite unit will lead to increased savings.
Shares of Israel’s biggest fixed-line provider gained 3.4 percent, the most since Aug. 29, to 5.45 shekels at 2:04 p.m. in Tel Aviv, bringing the stock’s increase to 37 percent this year and capping an 11 percent four-day decline through yesterday. The benchmark TA-25 Index (TA-25) of equities added 1.2 percent.
Israel’s Antitrust Authority will allow the provider to merge with its D.B.S. Satellite Services (1998) Ltd. unit, known as Yes, Calcalist reported yesterday. The company already owns a 49.8 percent stake in Yes, according to Bezeq’s website. Guy Hadass, a spokesman for Bezeq, declined to comment in a text message. Mark Schon, a spokesman for the Antitrust Authority declined to comment today by phone.
“The stock is up on the merger report and is rebounding from recent drops,” Gilad Alper, a senior analyst at Ramat Gan, Israel-based Excellence Nessuah Brokerage Ltd., said by phone today. “Bezeq would benefit from the merger because of the cost savings this would lead to and because it would enable it to offer multimedia packages to customers.”
Bezeq would buy Yes shares from Eurocom Group for more than 1 billion shekels ($276 million), Calcalist reported, without saying where it got the information.
Competition is increasing in the fixed-line market as Israel Electric Corp. sets up a competing fiber network and the Ministry of Communications is seeking to introduce a wholesale market. The government has said it will allow Bezeq to combine units nine months after the wholesale market is in place. A merger of units will help Bezeq save costs, Alper said. Bezeq now offers TV, Internet and phone services through separate units.
“An antitrust approval would be a step in the right direction but Bezeq still needs government approval to combine its units so that the company can really benefit from the merger,” Alper said.
Internet Gold-Golden Lines Ltd. (IGLD), which has a stake in Bezeq via its B Communications Ltd. (BCOM) unit, rose 3.9 percent. B Communications (BRCD), owner of a 31 percent stake in Bezeq, advanced 3.9 percent.
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