Saidoff bidding for Eurocom through Virgin Islands co

Virgin Islands Photo: Shutterstock

It is not clear yet whether the Israeli banks and regulatory institutions will agree to the involvement of Saidoff's Shayma Investments.

The Saidoff group planned to carry out its takeover of Eurocom through a company named Shayma Investments incorporated in the Virgin Islands, sources inform "Globes." The company is registered in the name of Ofer Saidoff, Naty Saidoff's brother, and the financing for the deal will probably come from it. At the same time, it is not clear yet whether the banks and regulatory institutions will agree to this; they may require the founding of an Israeli company for the deal.

According to sources familiar with the group, Ofer Saidoff has been living in Thailand for many years, and does not usually work for his living. He has inherited several apartments in the Saidoff Homes project in Jerusalem, and up until recently, his acquaintances said that he was not married, and had no children.

Sources familiar with the Saidoff group say that the connection to the Eurocom group and its controlling shareholder was made through Sleep Group Solutions (SGS), one of whose partners is Rani Ben-David, a former Israeli living in the US, who is close to the Elovitch family.

Ben-David is also a partner of Tamir Cohen, who manages Naty Saidoff's business in Israel, who also divides his time between the US and Israel. As far as is known, Cohen also knows the Elovitch family on the basis of a social acquaintance with his children. If the Saidoff group does complete the deal, Cohen is likely to become a dominant figure in Bezeq.

The Saidoff group says that the connection came about through Discount Capital, and that Ben-David is not part of the deal. In any case, it appears that Elovitch is the one who brought the deal to Saidoff, not the banks.

Eurocom Communications has a NIS 1.5 billion debt (including debt of its subsidiaries and of Eurocom Real Estate).

The law requires an Israeli concern in the controlling group

The likelihood of the Saidoff group going ahead with the deal by itself is small, and the company will probably have to take an Israeli partner, even though Saidoff is an ex-Israeli. In order to obtain a license from the Ministry of Communications, which is to approve the transfer of ownership, as legally required, there must be an Israeli concern in the controlling group with most of its activity in Israel.

This is reminiscent of what happened when Bezeq was privatized, when the Apax Partners-Saban group had to add businessperson Mori Arkin as a shareholder in the acquiring group. Arkin was not dominant in Bezeq's activity, and for him, it was merely a financial holding. For the investors, however, he was the Israeli concern through which Bezeq's license could be granted to the new controlling group.

There great sensitivity to the controlling shareholders of communications companies in Israel, and they undergo a careful check by the security services.

Patrick Drahi also underwent such a check when he acquired control of Hot Telecommunication Systems Ltd. (TASE: HOT.B1), and part of his "training" as an Israeli was through the purchase of a home in Israel and local residence. This is all the more true for Bezeq, which provides the main communications infrastructure for the entire security apparatus in Israel.

Among the other concerns that have expressed interest in the Eurocom group is businessperson Hezi Bezalel, who holds Xfone 018, and is looking for a way to enter the local market.

As far as is known, the parties have met, and Bezalel has tested the waters for raising money from overseas banks. At the same time, there is little likelihood that a deal with him will go through, primarily because Bezalel shows interest in almost every deal in the communications market, and experience shows that it usually does not amount to anything more than that.

Published by Globes [online], Israel Business News - - on December 31, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Virgin Islands Photo: Shutterstock
Virgin Islands Photo: Shutterstock
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