French-Israeli telecommunications tycoon Patrick Drahi is in talks to buy a controlling share of the Yedioth Ahronoth publishing group, producer of Israel’s best-selling daily newspaper.
The deal, said to be in an advanced stage, would see Drahi purchase a 34% stake in the Yedioth group, currently held by Eliezer Fishman, who earlier this year was declared bankrupt with a debt of NIS 1.5 billion ($425 million), the largest bankruptcy in Israeli history.
Drahi, who already controls the Netherlands-based Altrice company, also aims to snap up additional shares from members of the Mozes family, notably the 24% of shares in the company that are held by Arnon Mozes, Haaretz reported on Monday.
Mozes’s control of Yedioth is at the center of a corruption investigation into Prime Minister Benjamin Netanyahu, dubbed Case 2000, in which the premier allegedly negotiated a quid pro quo deal with Mozes that would have seen the paper give more favorable coverage in return for Netanyahu pushing legislation to hamper its main rival, the free-handout Israel Hayom.
A change in hands for Yedioth would be a milestone in Israeli publishing, as the company has been controlled by the Mozes family since the late 1930s.
Case 2000 rests on taped recordings of meetings between Netanyahu and Mozes in which the prime minister also offered to help find a purchaser for Yedioth. Among the names reportedly discussed were Larry Ellison and Australian billionaire James Packer.
A key former aide to Netanyahu, Ari Harow, has turned state’s witness and reportedly given evidence relating to the investigation as well as another corruption investigation into the prime minister. It was reportedly Harrow who, following instructions from Netanyahu, taped the meetings with Mozes. The recordings were later found by police as they raided Harow’s home as part of a separate investigation into the allegedly fraudulent sale of a company he owned.
Fishman’s shares were purchased 20 years ago with a NIS 1.1 billion ($278 million) loan from Bank Hapoalim, which now wants to sell the stock. At the time, Yedioth was valued at some $800 million but falling printed media advertising revenues have seen its worth drop over the past two decades.
Mozes reportedly held talks with another buyer over the past year but those negotiations fell through because the purchaser felt Mozes’s NIS 1 billion estimate for his shares was too high.
Altice’s portfolio ranges from French cable and mobile operator Numericable-SFR to the French daily Liberation and the L’Express weekly news magazine, as well as the Israeli TV station i24 News and the Israeli cable television operator Hot.
Under current Israeli law, Drahi is said to be barred from having control over both the cable concern and the publishing house, but could go ahead with the first part of the purchase.
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