Reshet, Channel 10 set ambitious merger timetable

Television channels image: PR

The two Israeli commercial television channels agreed to merge by September 30, but Antitrust Authority approval could take months.

The target date for operating the merged channel of Reshet and Channel 10 has been set for September 30, less than three months from now, sources inform "Globes." The shareholders of the two channels yesterday signed an agreement for a full merger stipulating that the merged channel would be broadcast on Channel 13, on which Reshet currently broadcasts.

This target date is very ambitious because of the preparation needed to set the merged concern in motion and especially because they are waiting for a response from the Antitrust Authority, whose consideration of the matter is likely to take several months. Following the signing of the agreement yesterday, the documents required for the review were already being submitted today to the Antitrust Authority, which can now begin a preliminary examination of the matter and make requests for comment to various concerns, the answers to which are likely to affect its decision.

A joint press release yesterday by the two companies said that one of thing agreed to by the two parties was that the board of directors of the merged concern would be professional, meaning that the board members would be representatives of the shareholders, not the shareholders themselves.

It is believed that this development is also partly due to the attempt to gain the Antitrust commissioner's support and to alleviate concerns about the character of the merged channel. It should be noted in this context that the news companies of the two channels, both Hadashot, which is due to be transferred to Keshet's sole control, and Hadashot 10, already have a separate structure in accordance with the law, in which 40% of the directors, including the chairperson, are representatives of the public. Past experience proves that the shareholders' have little ability to intervene in what is done in the channels.

On the question of the employees, the press release stated, "When the management of the merged channel compiles the broadcasting schedule and combines forces, it will receive our backing for keeping the vast majority of the employees at the present channels."

Two principal obstacles

The most substantial obstacle still facing the merger is approval by the Antitrust Authority. Even before the official application by Reshet and Channel 10, preliminary talks were already held between the channels' representatives and Antitrust commissioner Adv. Michal Halperin. The channels' impression was that Halperin's basic attitude towards the merger was unenthusiastic, to say the least, with respect to a plan that reduces the commercial television market from three players to two, despite the large losses being suffered by the three concerns and the fact that the merger would not reduce the existing supply of news (there are already only two commercial news companies operating).

Officially, after receiving the full agreement, the Antitrust Authority has 30 days to approve it, but it can also request more time to consider the matter. Based on the time taken by the Antitrust Authority to take final decisions about other important mergers, it is believed that it will take months to make a decision about this one.

A second obstacle to the agreement is the sale of Reshet's current 50% stake in the Hadashot company, in which it is a partner of Keshet. "Globes" reported on Tuesday that the two parties would resume their negotiations very soon and that the sale of Reshet's share would take place at an overall company value of NIS 300 million. Advocates Eldad Eldad Koresh and Orit Israeli from the Amit, Pollak, Matalon & Co. law firm represented Reshet 13. Advocates Yoram Bonen and Zohar Liss from the Fischer, Behar, Chen, Wells, Orion & Co. law firm represented Channel 10.

Published by Globes [online], Israel business news - www.globes-online.com - on July 5, 2018

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

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Television channels image: PR
Television channels image: PR
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