Matav Cable Systems Entered Into An Arrangement ToConsolidate Its Cable TV Activities With Other...

Business Editors

NETANYA, Israel--(BUSINESS WIRE)--Dec. 30, 1999

Matav-Cable Systems Media Ltd. (NASDAQ: MATVY) ("Matav") Further to the press release dated December 15, 1999 which reported negotiations related to the merger of the operations

of CATV cable companies in Israel, the Company today announced that on December 27, 1999, the Company, Gvanim - Cable Television Ltd. ("Gvanim"), Tevel Israel International Communications Ltd. ("Tevel"), Yedioth Communications Ltd. ("Yedioth") T.L.M. - Subscriber Television Ltd. (T.L.M.), Fishman Family Properties Ltd. ("Fishman Properties"), Gvanim - Krayoth Cable Television (1989) Ltd. ("Krayoth"), Haifa-Hadera Cable Communications Systems ("Haifa-Hadera"), Idan Israel Cable Systems Ltd. ("Idan") Idan Israel Cable Systems (Holdings) 1987 Ltd. ("Idan Holdings") and certain subsidiaries of the Company, Tevel and Yedioth (collectively - the "Subsidiaries") entered into a division and merger arrangement with respect to their operations in the cable television field (the "Arrangement").

The parties to the Arrangement will submit an application to the Court for the approval of the Arrangement by December 31, 1999. Such application will be submitted in such a manner that the Arrangement will be exempted from tax.

According to the Arrangement, the Subsidiaries, Krayoth, Fishman Properties, T.LM. Idan, Idan Holdings, Haifa-Hadera (collectively the "Absorbed Companies"), will be merged with and into Gvanim. Gvanim will be provided with all the assets, rights, licenses, agreements, powers and authorities of the Absorbed Companies, and will be bound by all the obligations of the Absorbed Companies, which will be dissolved by order of the court effective December 31, 1999 (the "Merger").

In consideration of the cancellation of all the shares of the Absorbed Companies on the eve of the closing of the Merger, Gvanim will issue, on the due date of the closing, its shares (pro rata to the holdings of the shareholders of each of the Absorbed Companies), according to the conversion ratio to be determined by the parties to the Arrangement, based, inter alia, on the number of cable television subscribers of each of the Absorbed Companies.

The approval of the Arrangement by the Court is conditioned upon the approval of the Arrangement by meetings which will be convened as required by law. The Arrangement determines that said meetings will be convened only following the parties entering into a definitive merger agreement based on the principals of the Arrangement and a Shareholders' Agreement determining the relationship between those who are to be the shareholders of the merged company. The approval of the Arrangement by the Court is conditioned upon obtaining tentative approvals from the Ministry of Communications, the Income Tax Commissioner, the Council of Cable and Satellite Broadcasting ("Council"), and the Restrictive Trade Practices Controller for the execution of the transactions related to the Arrangement.