US fund Searchlight is threatening to pull out of the deal for the acquisition of a controlling interest in B Communications Ltd. (Nasdaq:BCOM; TASE: BCOM), the controlling shareholder in Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), if the deal is not completed on the planned date. In a letter sent today to B Communications and its parent company, Internet Gold Ltd. (Nasdaq: IGLD; TASE:IGLD), Searchlight says that according to its understanding, if the control permit for Bezeq from Minister of Communications David Amsalem is not forthcoming today, the deal cannot be completed on time.
Searchlight writes that under the agreement between the parties, if the deal is not completed by November 24, each party in the deal is entitled to announce its cancellation. "We understand, based on the advice of our legal representative, that if the control permit is not granted by the end of the current business day, the deal will not be completed by the November 24 deadline, due to the period of time needed to complete various actions between receiving the permit and completion of the deal," Searchlight states.
The fund writes that it therefore reserves the right to announce the deal's cancellation on the final date, assuming that the deal is not completed by then. The control permit for Bezeq from the minister of communications is the final approval required to complete the deal, after the two parties obtained all of the other necessary permits in recent months, including approval from the Tel Aviv District Court.
A well-informed source said that between the granting of the permit and completion of the deal, a number of actions must be carried out. Among other things, Searchlight is required to call for money from its investors for the investment, while B Communications must offer new shares and bonds, while Internet Gold is supposed to transfer NIS 120 million to B Communications. These actions require time, which accounts for the pressure from Searchlight to receive the permit in the coming days.
B Communications, which holds 26.34% of the shares in Bezeq, is classified as the company's controlling shareholder. Earlier this year, Searchlight and its local partner, David Forer, signed an agreement to acquire control of B Communications. The Tel Aviv District Court later approved the deal, after it won the support of the bondholders of B Communications and its current parent company, Internet Gold, which is in a state of bankruptcy.
Published by Globes, Israel business news - en.globes.co.il - on November 6, 2019
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