Axel Springer leading contender to buy Zap Group

Nir Lempert
Nir Lempert

Axel Springer has already offered NIS 140 million for Zap.

The tender for the sale of control in Zap Group (formerly Yellow Pages) is making progress. After quite a few groups expressed interest, three consortia have decided to continue their participation in the tender. Sources inform "Globes" that Teddy Sagi and Apax Partners, which considered an investment in the websites group, controlled by a collection of investment institutions, are not among the three. The Sky and FIMI investment funds, which decided to withdraw their joint bid for control of Zap, are also out of the picture. The remaining groups in the race will now turn to the information room to obtain up-to-date financial data about Zap, and then, in a process that is expected to take several weeks, will submit their bids. The most prominent of the three is German company Axel Springer, which in the past already offered to acquire all of Zap's shares for NIS 140 million, the most outstanding offer to date.

Axel Springer is acting to extend its holdings in the local Internet market, after acquiring the Yad2 bulletin board website six months ago from Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) subsidiary Walla! for the princely sum of NIS 800 million. Following this acquisition, Axel Springer is waiting for the Antitrust Authority commissioner to state what conditions it must meet in order to enter the Zap information room.

Zap has 20 websites, led by the Zap price comparison website, the Zap-Yellow Pages website, the Rest restaurant portal, the Doctors health and medicine portal, and the Mitkhatnim (Getting Married) wedding website. CEO Nir Lempert manages the company, and Yaakov Elinav is chairman.

Axel Springer is one of the leading German publishers. Leading brands under its control include Bild, Die Welt, and Auto Bild. Entering Israel is part of its ongoing strategy of expansion in the online bulletin board sector.

Following the prolonged delay in the sale of Zap, the company's shareholders recently decided to expedite the process by publishing a tender for acquisition bids. Zap has already been looking for an investor for many months to reinforce its regular business and reduce its NIS 140 million bank debt.

As far as is known, the tender procedure includes the submission of bids for both control of the group (at least 51%) and for the purchase of all its shares. At the end of the process, the Zap shareholders will convene for a special meeting and select one of the bids.

Completely owned by investment institutions, Zap's principal shareholders are Menorah Mivtachim Holdings Ltd. (TASE: MORA), Psagot Investment House Ltd., Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), Meitav DS Holdings Ltd. (TASE:MTDS), and Excellence Investments Ltd. (TASE: EXCE). The institutions took control of Zap in 2009, after the company announced it would not be able to meet obligations totaling NIS 500 million (NIS 350 million to the bondholders and the rest to Bank Hapoalim (TASE: POLI)).

Published by Globes [online], Israel business news - www.globes-online.com - on September 23, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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