Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) CEO Stella Handler has joined Bezeq controlling shareholder Shaul Elovitch and DBS Satellite Services (1998) Ltd. (Yes) CEO Ron Eilon on the list of those questioned by the Israel Securities Authority in the Bezeq-Yes affair. As revealed by "Globes," minutes of the discussions by the Bezeq board of directors show that Handler took action to increase the price of Bezeq's acquisition of Yes, arguing that it was worth NIS 3 billion to Bezeq, while Gilad Rozolio and Marc Dohan from Merrill Lynch (the investment bank that gave advice while the deal was being negotiated), who were present at the discussion, argued that the price for the deal should be much lower.
Handler said at the board of directors' discussion, "I did several checks. Telecom companies with television are traded at a 5.6 multiple, and Bezeq is traded at a 6.6 multiple, because it has a 49% holding in Yes. This increases its value, at least that's how I interpret it, in comparison with infrastructure companies with television holdings, which are traded at a 7.7 multiple. In my opinion, if Bezeq controls 100% of Yes, it will be the same as the cable companies that are traded at 8.5. There are very large differences here, and I estimate the added value that Bezeq can obtain following its acquisition of full ownership of Yes at NIS 3.5-4 billion. As I see it, this is a very big asset."
The question is whether Handler thereby ostensibly acted against the interests of Bezeq's shareholders, and in favor of controlling shareholder Elovitch. Elovitch also owns Eurocom, whose shares in Yes were the subject of the transaction.
Following her questioning by the ISA, Handler posted a message to Bezeq employees on her Facebook page:
"These are difficult days for Bezeq. You are certainly aware of the investigation by the Israel Securities Authority. It is important for me to address you in order to emphasize that the investigation in question has no bearing on the activity on the company's activity. We shall continue to act with the same commitment to meet our goals in all aspects, from infrastructure development to investment in innovation and advanced services, to service to our customers.
"We bear the responsibility of maintaining Bezeq's leadership and continuing to provide excellent service to our customers, both business and private.
"We Bezeq workers have known crises of various kinds over the years, and we have always managed to emerge from them stronger. I am convinced that that will be the case now as well."
Published by Globes [online], Israel Business News - www.globes-online.com - on June 22, 2017
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