Internet Gold Golden Lines Ltd. (Nasdaq: IGLD; TASE:IGLD), headed by CEO Doron Turgeman, notified the Tel Aviv Stock Exchange yesterday that it had received several offers to buy its stake in B Communications Ltd. (Nasdaq:BCOM; TASE: BCOM), the company that directly controls Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ). The offers are to buy Internet Gold's entire holding or to come in as a strategic partner with Internet Gold continuing to hold a stake.
The offers are believed to have come from overseas entities with substantially more financial clout than the parties with which Eurocom's creditor banks have been holding talks on selling control of Bezeq. A deal with Internet Gold would involve much more money than the sale of Eurocom's holding in Internet Gold. Internet Gold has a 65% holding in B Communications. A deal for the sale of these shares would presumably carry a control premium that would bring its value to around NIS 1 billion.
The offers are apparently serious, and Internet Gold said that it would consider them serious over the next two weeks, so it is possible that a deal will be signed shortly. As far as is known, the overseas bidders have not expressed interest to the banks in recent months in buying Eurocom's holding in Internet Gold, preferring to buy lower down the pyramid in a less leveraged deal. On the other hand, various financiers have expressed interest in buying further up the pyramid.
In the light of this development, it is unclear what will become of the equity offering Internet Gold planned in order to improve its financial position. It is not inconceivable that the offering will take place in parallel to negotiations on a sale, and as far as is known no decision has yet been reached on the matter.
Internet Gold is in a precarious financial position, and planned to make a share offering last week, but because of the hesitation of the Eurocom's creditor banks over whether to participate in the offering, and the fall in Internet Gold's share price, the offering was deferred to this week, but, as mentioned, in the light of the most recent developments this is now in question.
Published by Globes [online], Israel business news - www.globes-online.com - on June 11, 2018
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