Ahead of the petition for liquidation of the Eurocom Group, the creditor banks have received two bids to acquire the company's main asset: Internet Gold Ltd. (Nasdaq: IGLD; TASE:IGLD), the controlling shareholder in Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ). One of the bids is by Naty Saidoff, and the other is by the Neuman brothers, who previously bid to acquire Eurocom, and are now bidding for the acquisition of Internet Gold by itself.
The banks, however, are unenthusiastic about the two bids, which are based mostly on Internet Gold's current low market cap. The banks are inclined to proceed with the liquidation petition that they submitted to the court, and to have liquidators appointed who will conducted regular auctions for selling Eurocom's various assets.
The Neuman brothers filed a revised bid on Friday afternoon offering to pay NIS 165 million for Internet Gold shares: NIS 130 million on the transaction date (about the shares' current value) and NIS 35 million more at the end of 2019.
The Neuman brothers are also offering two upside mechanisms. The first is a NIS 25 million payment at the end of 2019 if the share price reaches NIS 30 (more than double its current price). The other, which is for up to NIS 140 million, subject to an increase in the share price, is valid for three years.
The total payment for Internet Gold shares could be as high as NIS 450 million, but most of the payment is contingent on a sharp increase in the company share price. The Neuman brothers are demanding that the banks approve their bid by Sunday morning, and guarantee them exclusivity in promoting the deal.
At the same time, renewed efforts have been made in recent days for a deal with the Saidoff group, but no breakthrough has been achieved there, either. The Saidoff group is willing to pay around NIS 150 million for the shares, with an upside mechanism of NIS 100 million if the share price rises, plus a commitment to participate in an offering of rights by the company in order to strengthen its shareholders' equity.
Judge Eitan Orenstein asked Saidoff and the banks to demonstrate willingness to compromise, and to make an effort to find a new outline for a deal before he issues a ruling on the question of the NIS 50 million that Saidoff deposited to show the seriousness of his bid. The banks want to foreclose the deposit because Saidoff withdrew from a previous outline for an agreement.
Published by Globes [online], Israel business news - www.globes-online.com - on April 22, 2018
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