Alex Hartman, the receiver for Gad Zeevi's shares in Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) has filed a request with the court to sell the shares after obtaining permission from the Ministry of Communications to do so. Hartman and the banks that have liens on the shares reached a deal on the sale structure so that the banks can get back the money they loaned to Zeevi to buy the shares.
Hartman is the receiver for shares amounting 17.1% of Bezeq, which are currently worth NIS 3.2 billion. It will be difficult for Zeevi to oppose the proposed structure of the sale, although he will presumably try to do so in an effort to get a higher price.
Hartman proposes marketing the shares as a single block at a minimum price of 85% of the share's market price. If the Bezeq share price is above the amount of the debt per share, Zeevi will receive the balance. The shares will not be sold for less than the minimum price.
The idea is to reach a settlement with Zeevi, who has consistently opposed any sale on the grounds that the price was too low. Hartman has set up a sale structure at the market price of Bezeq shares, underwritten by the banks, in order to negate Zeevi's opposition.The proposed structure is based on the appropriate price, being the market price, and with the banks agreeing to it, Zeevi cannot claim to be receiving a lower price than warranted.
When the court approves the sale structure, Hartman is expected to market the Bezeq shares to large institutional investors. In view of the current market climate, a syndicate of investors may be set up to buy the shares, since no single institution will likely want to buy all of them given the amount of money involved for shares that will be traded, rather than kept as a holding in Bezeq.
Published by Globes [online], Israel business news - www.globes-online.com - on May 24, 2009
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