Daily newspaper "Maariv" found itself in the embarrassing position last night of having both its main shareholders in jail. However, it is important to mention that Vladimir Gusinsky , arrested last night by the Russian authorities, is not involved in day to day management at Maariv. Mark Meyerson, who represents Gusinsky’s Most media group in Israel, said the arrest would not affect the group’s Israeli activity.
Jewish multi-millionaire Vladimir Gusinsky, who has accumulated in only a few years real estate, financial, and, principally, media assets in the Commonwealth of Independent States, hit the headlines in the business pages of Israel’s newspapers in September 1997. A hat time, Most Communications, Gusinsky’s investment arm in Israel, bought Hanania Gibstein’s shares in cable television company Matav (some 10% of the company’s shares).
It is believed that what brought Gusinsky to Matav was the man who controlled the company, Shmuel Dankner. The two met when Dankner accompanied then Minister of National Infrastructures Ariel Sharon on a trip to Russia. There were reports of talks between them on importing Russian natural gas to Israel.
That venture never took off, but they did begin to cooperate in other ways: first through Gusinsky’s investment in Matav, and later through his $31 million investment in half of Danker’s holding in the Haifa mall. Incidentally, Gusinsky sold his Matav investment last year at a $20 million profit.
His big breakthrough into the heart of Israel’s communications industry came when Most Communications invested $85 million, in cash, in a quarter of the shares in Israel’s second largest newspaper group, Maariv. Under an agreement signed in July 1998, Gusinsky paid a price much higher than the newspaper’s value at the time, and still 50% higher than Maariv’s current market value.
Under the agreement between Most Communications and the Nimrodi family’s Israel Land Development, which controlled Maariv, Gusinsky was given right of first refusal on Israel Land Development’s shares in Maariv, if it decided to offer them for sale. However, the agreement limits Most to a holding of 30% of the company, and forbids it from selling its shares to a competitor.
Until October 1999, Gusinsky was considered a silent partner in Maariv, but the investigation and jailing of publisher Ofer Nimrodi in connection with allegations that arose out of the wiretapping affair changed the balance of power at Maariv.
Adv. Zvi Hefetz, until then Gusinsky’s representative on the Maariv board, became deputy chairman of the board, and a full partner in strategic decisions. It is believed that he put together the deal meant to launch Maariv into the Internet in a big way. The company last month announced joint venture with Bezeq International and Most Communications to set up an Internet company worth $150 million. Under the deal, which still requires the Antitrust Authority approval, Most and Maariv will buy 42% of the shares in Bezeq International’s Internet activity for $36 million.
Bezeq International currently provides Internet service to 100,000 subscribers, and also holds shares in portal Walla!. The second stage of the deal is the merging of all the Internet activity into Walla! In a share swap deal, following which Most and Maariv will hold some 34% of the merged Walla!
Published by Israel's Business Arena on June 14, 2000