Internet entrepreneur Zaki Rakib has increased total investment in Ma'ariv Holdings Ltd. (TASE: MARV), the owner of Hebrew daily "Ma'ariv" and will effectively control the company. Rakib reached the deal with Ma'ariv chairman and publisher Ofer Nimrodi who controls the company through Israel Land Development Company (TASE: ILDC), two months after they signed the letter of intent.
In addition to the original NIS 15 million investment in Ma'ariv for a 30% stake, Rakib has increased his commitment to save the newspaper from its severe crisis. He will assume the paper's entire NIS 110 million debt to Bank Hapoalim (TASE: POLI), and has undertaken to inject an additional NIS 60 million into the company in exchange for shares.
Rakib will also apparently buy the Ma'ariv shares held by the trustees of Vladimir Gusinsky, a former member of management of the company, for NIS 20 million.
When all the transactions are completed, Rakib and Israel Land will have equal stakes in Ma'ariv and Rakib will be appointed chairman.
Rakib said, "I believe in Ma'ariv. It has a great future."
Nimrodi said, "This is a great day for journalism and for Ma'ariv."
Media market sources believe that Rakib plans to take the "Ma'ariv" brand into the new media world and increase its digital activity at the expense of its print business.
"Ma'ariv" is in deep distress. The paper lost its standing as Israel's second largest daily (after "Yediot Ahronot") to freesheet "Israel Today".
Published by Globes [online], Israel business news - www.globes-online.com - on May 27, 2010
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