May 15, 2019 / 10:30 AM / 4 months ago

BCom board backs Searchlight bid to buy Bezeq parent stake

JERUSALEM (Reuters) - Searchlight Capital Partners moved a step closer to taking control of Israel’s largest telecoms group, Bezeq Israel Telecom, after its parent B Communications said on Wednesday it was satisfied with Searchlight’s latest offer.

The U.S. private investment firm on Tuesday sweetened its bid to buy a controlling stake in Bezeq, offering a total equity investment of 330 million shekels ($92.5 million) in B Communications and another 225 million shekels in BCom’s parent, Internet Gold.

Internet Gold has been searching for a buyer for its majority stake in B Communications since mid-2018 under pressure from bondholders. BCom’s single asset is a 26.34 percent controlling stake in Bezeq.

In a regulatory filing in Tel Aviv, BCom said the latest offer will allow it to make a final payment on one of its bond series and enable Bezeq’s share price — which has slid to a two-decade low — to recover, despite the offer reflecting a discount to the market price.

“The board of directors is of the opinion that the amended proposal that was submitted properly balances the interests of all the relevant parties, solves legal disputes that might have complicated and delayed alternative solutions ... and creates a worthy solution,” BCom said.

It said the deal requires a host of approvals, including from bondholders, but added: “We hope the spirit of cooperation will help to pass them all successfully.”

Bezeq has undergone a reorganization in recent months following a securities investigation into its management and owners that forced out its former chairman and chief executive.

The company remains the dominant telecoms group in Israel, providing phone and internet infrastructure, while owning three units — mobile phone operator Pelephone, satellite TV firm YES and internet service provider Bezeq International.

Internet Gold is controlled by indebted Israeli holding company Eurocom.

Reporting by Steven Scheer; Editing by Alexandra Hudson

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