IDB drops Bezeq bid

10 Mar 2005

The IDB group and its partner Markstone officially exited the race to buy Israeli telco Bezeq yesterday, blaming overly tough restrictions imposed on it by the anti-trust authorities. As a result of its withdrawal, just two consortia are expected to make it to the final stage of the tender. IDB’s decision to not participate followed Antitrust Commissioner Dror Strum’s ruling that IDB could only buy Bezeq if it agreed to sell its 25% stake in Israeli cellco Cellcom – a direct competitor to Bezeq’s mobile subsidiary Pelephone – within two years, as well as its holdings in several other communications enterprises – including the internet service provider NetVision (100%), international operator Barak (44%) and MED-1 Submarine Cables (15%) – within eight months.

IDB is the second group to withdraw from the race, the first being the Israel Land Development Corporation, in association with Vladimir Gusinsky. The government hopes to wrap up the tender for its 30% controlling interest in Bezeq within a couple of months. The remaining two bidders are Packard Bell founder Benny Alagem, bidding with France Telecom, and the Apax investment fund, bidding with media mogul Haim Saban.

Israel, Bezeq (Israel Telecommunication Corporation)