Economy03:55 · 12m ago

Bank Leumi Plays Triple Role in Keystone-Led Hot Mobile Acquisition

Globes

Translated & summarized from Globes by baba

Key points

01Bank Leumi invests in Hot Mobile acquisition in three roles, including direct equity and loan provision.
02Total deal value is 1.2 billion shekels, with 500 million in equity and 700 million as a 10-year loan.
03Leumi Partners holds 20% of Hot Mobile and 20% of Delek Israel, increasing effective ownership.
04Hot Mobile has nearly 2 million subscribers but low ARPU due to discount brand perception.
05Owners plan to upgrade Hot Mobile’s network and consider rebranding the company.
06Deal awaits regulatory approval before pursuing Hot Mobile’s stock market listing.

In this story

People

Victor Wert, Michal Cohen, Patrick Drahi, Avi Levi, Ilik Rozanski, Uri Menzur, Yitzhak Tshuva

OrganizationsBank Leumi, Leumi Partners, Delek Israel, Keystone Infrastructure Fund, Hot Mobile, Partner Communications, PHI, Altice

PlacesIsrael

The story · English

A week after the sale of Israeli cellular company Hot Mobile to a consortium led by Delek Israel and infrastructure fund Keystone, it has emerged that Bank Leumi is the key player on the buyer side, participating in three distinct capacities. The total deal value is approximately 1.2 billion shekels, with about 500 million shekels in equity from the buyers and an additional 700 million shekels provided as a 10-year non-recourse loan to Hot Mobile, replacing existing debt to former owner Patrick Drahi. Bank Leumi is expected to provide this loan and also invests through its active investment arm, Leumi Partners, which will hold a 20% stake in Hot Mobile by investing 104 million shekels alongside Delek Israel and Keystone, each holding 40%. Additionally, Leumi Partners recently acquired a 20% stake in Delek Israel for 213 million shekels, with the funds used by Delek Israel to finance its Hot Mobile purchase. This structure results in Leumi Partners having an effective ownership in Hot Mobile exceeding 20%. Regulatory considerations reportedly permit this layered ownership.

Delek Israel operates around 240 fuel stations and owns brands such as Burger King Israel, convenience stores Menta, and Zappa clubs. Leumi Partners views the combined investment in Delek Israel and Hot Mobile as balancing stability and growth potential, with Delek Israel providing strong cash flow and dividend prospects, and Hot Mobile offering significant future value enhancement opportunities. Hot Mobile is Israel's fourth-largest cellular operator with nearly 2 million subscribers and a market share estimated between 13% and 16%. However, it suffers from a low average revenue per user (ARPU) due to its discount brand perception.

Financially, Hot Mobile reported revenues close to 1.4 billion shekels in 2025, a 2.6% decline from 2024, with gross profit rising 3.9% to 855 million shekels and a gross margin improvement to 62.3%. Operating profit remained steady at 60 million shekels, while net profit dropped sharply to 45 million shekels from 85 million the previous year. The new owners plan to enhance Hot Mobile’s business, operational, and infrastructure capabilities, including upgrading its approximately 2,000 antennas and advancing 5G and eventually 6G technologies in cooperation with Partner Communications under existing network-sharing agreements.

The consortium is also considering rebranding Hot Mobile, which they can use for five years post-acquisition but may replace due to its damaged brand image. Possible new names include "Delek Mobile" or an international cellular brand. The deal still requires approval from the Ministry of Communications and the Competition Authority, after which the partners intend to pursue a public listing of Hot Mobile on the stock exchange.

Read the original at Globes