The struggle between Eli Azur and CanWest Global Communications Corp. (NYSE: CWG; TSX: CGS) over their joint control of "The Jerusalem Post" is heating up. The deal has not gone forward to date. Toronto daily "The Globe and Mail" quotes CanWest as accusing Mirkaei Tikshoret Ltd., controlled by Azur, of "extortion".
"The Globe and Mail" reports that Aviv Bushinky, a media advisor to Benjamin Netanyahu when he was prime minister who was appointed publisher of "The Jerusalem Post" by both parties, told the newspaper's staff that its printing plant, business and administration offices would be moved to Tel Aviv, and the newspaper's building site sold. He said that "The Jerusalem Post" editorial offices would remain in Jerusalem.
"The Globe and Mail" reports that CanWest said that Mirkaei Tikshoret paid Hollinger International Inc. (NYSE:HLR) $13.2 million in cash for "The Jerusalem Post", after problems arose with CanWest over their agreement for joint ownership of the newspaper. CanWest has not yet transferred to Mirkaei Tikshoret the $6.6 million.
Mirkaei Tikshoret said in response, "The company will not be dragged into a campaign of slander that the other party is trying to present. Unquestionably, there is a deep chasm between Mirkaei Tikshoret and CanWest, which cannot be bridged.
"There are different attitudes and world views between the two groups. Since the chasm cannot be bridged, it is unclear why CanWest, through its campaign of slander, wants to be a partner of Mirkaei Tikshoret."
"Globes" reported yesterday that sources close to the deal had said recently that one of the reasons why CanWest has not yet transferred the money to Mirkaei Tikshoret was its expectations of easier terms and monetary discounts in the agreement signed between the parties signed six weeks ago.
Several days ago, CanWest, controlled by the Asper family, announced it was taking the dispute to arbitration in a New York court. At CanWest's request, the Supreme Court of New York issued a temporary restraining order stopping Mirkaei Tikshoret from selling any of "The Jerusalem Post's" assets, firing employees, or making other changes at the newspaper.
After the deal was signed, sources claimed that Azur wanted sole control of "The Jerusalem Post" out of concern that CanWest would continue the paper's right-wing editorial policy. Now that Azur knows how much the newspaper and its premises are worth, estimated at $7 million, it cannot be ruled out that he realized the deal was even more worthwhile without the Canadians.
Published by Globes [online], Israel business news - www.globes.co.il - on January 27, 2005