Even before the Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) board of directors' decision to sell Walla!, owner of one of Israel's most popular news websites, was officially published, there were already parties in the market expressing interest and considering the matter. Sources inform "Globes" today that the RGE group had expressed interest in Walla!'s operations, while several other parties were also mentioned, including businessperson Eli Azur, the controlling shareholder in the Jerusalem Post and Ma'ariv group, the Charlton sports channels, and radio stations 99 FM and 103 FM.
"Globes" reported in March that businessperson Ami Giniger, controlling shareholder of Taya Investment Co. Ltd. (TASE: TAYA), was interested in acquiring the websites. A market source told "Globes" today that the price tag for the website had previously been put at NIS 200-250 million.
Together with Ynet, controlled by the Yedioth Ahronoth group, Walla! is one of Israel's largest websites. The website posted a NIS 27 million loss in 2017 and a NIS 50 million loss over the past two years. It is believed that a large proportion of this loss involves Walla!'s major investment in large television studios and a series of leading talents it recruited, including news broadcaster Ya'akov Eilon. At the same time, in 2014, Walla! brought off a deal that stunned the Israeli market by selling the Yad2 online bulletin board for NIS 800 million to media giant Axel Springer. A substantial proportion of the proceeds went to Bezeq's owners as a dividend, part was invested in the website, and it is not clear now how much of the money the company still has.
RGE is one of Israel's most prominent media groups whose most important holding, Channel 10, has been under severe economic pressure since the split of Channel 2 in November. The split resulted in huge losses for the entire commercial television market, and losses in the tens of millions of shekels are projected for Channel 10 over the coming year. The group also holds the Sport 5 channels, whose market has also become tougher than in the past as a result of the spurt in sports rights prices, and the veteran Children's Channel, now being broadcast on CellcomTV and PartnerTV.
The company's interest in Walla! is not new; it has been on the agenda for a long time after it was realized that Bezeq would eventually conclude that as an infrastructure company, it had no reason to continue holding a content company like Walla!.
Giniger has also been interested in acquiring Walla! for a long time. Through Taya, he controls Herzliya Studios, which both produces and develops television content and provides studio, broadcasting, and production services to various channels. Over a decade ago, Giniger competed as part of a group named Kan in the second tender for Channel 2 and was subsequently mentioned at various stages as a candidate for the acquisition of Channel 10. A company in which Taya took part also bid in last year's tender to operate the Knesset channel for 10 years.
Published by Globes [online], Israel business news - www.globes-online.com - on May 24, 2018
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