Saban group unloading 5-10% stake in Bezeq

The Saban-Apax-Arkin group is selling between 5% to 10% of Israel's biggest phone company, Bezeq. The group, consisting of media baron Haim Saban, the Apax investments fund and businessman Mori Arkin has hired Citibank to handle the placement with institutional investors.

The group expects to realize between $250 million to half a billion dollars from the deal, depending on how much is sold. In any case the transaction will apparently be done at a share price range of $7.50 to $7.60.

The Saban-Apax-Arkin consortium owns 40.3% of Bezeq's stock, before the sale.

Citi won the tender to distribute the Bezeq shares to institutional investors, beating out the Swiss investment bank UBS, Germany's Deutsche Bank, and Goldman Sachs of New York.

The selloff by Bezeq's controlling shareholders has significance beyond the transaction itself.

Repercussions for Zeevi

Alex Hartman, the lawyer acting as receiver of businessman Gad Zeevi's shares in Bezeq, will have a much more difficult time finding happy homes for the 17.6% interest in the company he's trying to sell. At least in the short run, Israel's institutional investors will have already stocked up on Bezeq shares distributed by Citi.

A month and a half ago, Hartman sought the court's blessing to solicit offers for blocks of the stock, as opposed to the entire stake.

Originally the court's instruction was that the stock be sold in a single block.

He also asked for the court's permission not to advise it of the date of any sale, in order to avoid moving the share price to the detriment of any transaction.

Hartman was appointed receiver for Zeevi Communications, which had been sued by the consortium of banks the company had borrowed money from, that it then defaulted on.

Zeevi Holdings collapsed and entered receivership in 2004. Banks Hapoalim, Leumi, First International Bank of Israel, Israel Discount, Mercantile Discount, Union and Mizrahi Tefahot were all creditors.

Despite the economic downturn, Bezeq has been having a good year. For the second quarter of 2009 the company reported a 5% increase in revenues, year over year, to NIS 3.2 billion, on which it netted NIS 541 million, up 18% from the corresponding period of 2008.