Cable television company Golden Channels, owned by Aurec, Monitin Publishing, and Yediot Aharonot, last night signed an agreement with NetManage to buy its share of Internet company NetVision for $17 million. The deal was done through a subsidiary of Golden Channels.
The deal involves a third of the company’s share capital, and 32.3% of the preferred stock. The rest of the holdings in the company’s capital is divided between cable company Tevel (34%), the Elron group (32%), and Net-Media (2%). NetVision’s preferred stock represents 80% of its capital shares, the remainder being in the form of employee options.
The deal was done at a company value of $51 million, and, given that the company serves about 100,000 subscribers, this means a price of more than $500 per subscriber. Internet Gold is demanding a similar price from Pele-Phone in negotiations over the acquisition of over 25% of the company. Bezeq International recently bought ISDN-Net’s Internet access activity plus Trendline at a price of $250-300 per share.
Golden Channel’s entry into NetVision, in which cable television company Tevel also has a one-third holding, creates a situation in which the country’s two largest cable companies together control the country’s largest Internet company.
However, the deal is expected to encounter considerable difficulty in being approved, both from the Ministry of Communications and from Restraint of Trade Commissioner David Tadmor. These two bodies are striving to separate the cable television network infrastructure from control over content, and the deal for Golden Channels to acquire part of NetVision runs counter to this aim.
When Tevel bought its share in NetVision, Tadmor approved the deal but at the same time imposed harsh limitations. Among other things, Tadmor stated at the time that, if the Ministry of Communications should decide on a policy of complete separation between infrastructure and content, in relation to both cable television and Internet, this would compel Tevel to sell its holdings.
Monitin Publishing is the parent company of "Globes".
Published by Israel's Business Arena on December 24, 1998