Channel 10-Reshet merger takes step forward

Reshet-Channel 10 merger  image: Shutterstock

The Second Broadcasting Authority Council is consulting with the Antitrust Authority director general.

Will the long-anticipated merger between Reshet and Channel 10 take another step forward? Sources inform "Globes" that the Second Broadcasting Authority Council, under its chairperson, Yulia Shamalov Berkovich, is holding the legally required consultations with Antitrust Authority director general Dr. Michal Halperin, who also chairs the Committee for the Reduction of Concentration.

The Second Broadcasting Authority Council's request for consultation indicates the final structure of the requested merger.

The ownership structure of the merged channel about which the Second Broadcasting Authority is consulting consists of an allocation of 40% of Reshet's shares to the RGE group, the controlling shareholder in Channel 10. Each of RGE's owners will hold 13.33% of the shares in the merged channel. XT, controlled by Idan Ofer and Udi Angel, will hold 30%, Michael Strauss 9.6%, and the Endemol Shine Group 19.8%.

The Second Broadcasting Authority emphasizes that the holding structure of the merged channel is likely to change later according to the final value of the companies.

The main reason why the Second Broadcasting Authority is required to consult with the Committee for the Reduction of Concentration is that one of Channel 10's controlling shareholders, Len Blavatnik (the Access group), is classified as a concentrated entity because he has holdings in other companies in the Israeli market unrelated to television, for example Clal Industries. In a preliminary by the Second Broadcasting Authority Council about Channel 10, the channel claimed that the merger reduces Blavatnik's power in Israel, because his concentration power in the market in any case waned with the years after Access sold various holdings in some companies.

Channel 10 further argued that approval is not being sought for a new player with no control in a television channel; the controlling share under one license is being replaced by another license in which Blavatnik will have minority rights, in contrast to the substantial rights he now has in Channel 10.

The Second Broadcasting Authority Council's request shows that in the current situation, Blavatnik can reach larger holdings than he now has: 100% control of Channel 10 under the agreements he has (limited in the 74% he can reach according to regulations).

The Second Broadcasting Authority Council asked Channel 10 for additional information besides what it reported to the Antitrust Authority director general - information that has not yet been provided.

Published by Globes, Israel business news - en.globes.co.il - on November 6, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

5 Comments
View comments in rows
Update by email about comments talkback
POST
Comments
Reshet-Channel 10 merger  image: Shutterstock
Reshet-Channel 10 merger image: Shutterstock
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018