Bezeq pulls equity offering under investor pressure

Bezeq Photo: Reuters

B Communications and foreign shareholders in Bezeq expressed opposition to the measure.

Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) today announced that it is scrapping the plan it recently reported to increase the company's equity. Following talks on the matter with shareholders and responses to its queries, Bezeq's board of directors announced that increasing equity would be removed from the agenda of the upcoming shareholders' meeting.

Foreign investors and investment institutions with holdings in Bezeq exerted heavy pressure on Bezeq's board to postpone its planned financing round. Foreign investors expressed dissatisfaction, and warned that the planned measure would eliminate any reason for them to continue holding the share.

Last week, Bezeq CEO David Mizrahi and CFO Yaheli Rotenberg held meetings with investors in London, and were asked about the reasoning behind the measure. They explained that they thought there was a need to reinforce Bezeq's capital structure, given the state of the communications market, but they apparently failed to convince the investors. Investors naturally fear dilution of their holdings, which have already suffered from the fall in Bezeq's share price over the past year.

What tipped the scales was opposition from Bezeq controlling shareholder B Communications Ltd. (Nasdaq:BCOM; TASE: BCOM), which last week sent a letter to the board of directors expressing opposition to a financing round. This made it clear that there was no chance of the general shareholders' meeting approving the measure. It was therefore decided not to continue with a plan opposed by a majority of the shareholders.

Businessperson Gad Zeevi filed a bid to acquire a controlling interest in Bezeq. Internet Gold reported yesterday that Zeevi, through the Shimonov & Co. law firm, submitted a detailed bid to Internet Gold's shareholders. In the distant past, Zeevi was a shareholder in Bezeq.

Published by Globes, Israel business news - - on April 8, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Bezeq Photo: Reuters
Bezeq Photo: Reuters
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