Bezeq banks in no hurry to sell so long as the dividends keep coming, papers say

11 Oct 2006

The six Israeli banks holding a combined 18% stake in the country’s fixed line incumbent Bezeq (Israel Telecommunication Corporation) are in no hurry to sell their stake, according to local daily Globes quoting unnamed sources. Last month the Saban-Apax-Arkin consortium, the controlling shareholders of Bezeq, reportedly began talks with the banks with a view to rushing through a quick deal to buy their combined stake in the telco. However, the source says the banks have decided not to pursue a sale at this time and have instead decided to benefit from a number of expected dividends to be issued by Bezeq in the coming months, including an ILS400 million (USD93.7 million) payment due on 30 October. Earlier this year Merrill Lynch predicted that Bezeq would distribute ILS2.7 billion in dividends in 2006.

According to TeleGeography’s GlobalComms database, the banks acquired the shares in Bezeq when they foreclosed on businessman Gad Zeevi after he failed to meet obligations under a credit agreement, but they have no intention of retaining the stake and Saban-Apax-Arkin is keen to buy. The consortium, comprising Israeli entrepreneur Haim Saban’s SGC Israel Ventures, private equity firm Apax Partners and local businessman Mori Arkin, acquired a 30% stake in Bezeq in May 2005.

Israel, Bezeq (Israel Telecommunication Corporation)