Just a few days after the oral agreement on the sale of Hebrew daily "Ma'ariv", differences have emerged between the prospective buyer, Shlomo Ben-Zvi (publisher of "Makor Rishon"), and the representatives of seller IDB Holding Corp. Ltd. (TASE:IDBH).
According to sources close to the negotiations, after examination of the figures, the revenue projections of Ben-Zvi's representatives are 25% lower than those given by IDB.
In the light of this, Ben-Zvi is expected to ask for an adjustment to the deal price. Nevertheless, at present there is no real fear of the deal being cancelled altogether, and the difference is regarded as a normal part of complicated negotiations.
Another matter at issue is manpower. Sources inform "Globes" that, contrary to previous estimates, Shlomo Ben-Zvi has agreed to take on only 250 employees after the change of ownership. "Ma'ariv"'s editorial staff is currently 350 strong, and, together with administrative, printing, and distribution staff, the total workforce consists of about 2,000 employees.
Under the agreement being formulated, Ben-Zvi will require Discount Investment Corporation (TASE: DISI), the IDB unit that holds "Ma'ariv", to complete the streamlining process, that is, to dismiss the employees that will not be hired, by the time the deal is completed.
The expectation is that the deal will be signed by the end of this week and will be completed in early October.
According to sources familiar with the negotiations, Ben-Zvi expressed disappointment at the range of salaries at "Ma'ariv". According to these sources, the streamlining process will also involve substantial salary reductions, after "astonishing anomalies" and wide salary gaps were found.
Among other things, it is reported that the gap between the highest and lowest paid journalists on the newspaper is 1,000%.
Published by Globes [online], Israel business news - www.globes-online.com - on September 10, 2012
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