Bezeq privatisation gets under way

10 May 2005

The Israeli government has reportedly accepted bids from two groups looking to acquire a controlling stake in the country’s dominant telco and monopoly fixed line operator, Bezeq Israel Telecom. The first, led by Israeli entrepreneur Haim Saban’s SGC Israel Ventures unit, Apax Partners and local businessman Mori Arkin, is seen as the leading contender, although a rival bid from Benny Alagem’s US-based investment vehicle Whitepoint Communications – in tandem with Canyon Capital, Clarity Partners and Israel-based insurance firm Phoenix – has also been short listed. France Télécom (FT) was to have been part of the latter consortium, but was barred from participating by the government which cited security concerns as the reason; FT is state-controlled and also has telecoms interests in the Arab world.

The winning bidder looks set to pay a minimum USD850 million (GBP451 million) for a 30% stake in Bezeq, with the option to purchase a further 10.66% later. The government currently holds 46.38% in the national operator, which in turn owns the Pelephone mobile unit and 50% of satellite broadcaster YES TV.

Israel, Bezeq (Israel Telecommunication Corporation)