Taking Stock / Nochi's out. Good
Nochi Dankner says it's final.
Final, finito, don't waste your breath, disgusted, mad as hell, moving on. We were deadly serious about buying Bezeq, but the terms that Antitrust Commissioner Dror Strum imposed would have cost too much.
Nochi says his withdrawal is final, but Jerusalem circles aren't convinced. They say it's a negotiating ploy. There's a reason Dankner went to meet the prime minister two weeks ago; politicians may tremble at the departure of a top player like Dankner from the most prestigious privatization in Israel and press Strum to bend.
Strum says it's final; I'm locked into position. We want to privatize the phone company, but with all due respect to Dankner, he has holdings in four competing companies that he can't keep if he wants to buy Bezeq. We won't contort ourselves into pretzels for his pleasure.
The whole truth
Strum is not telling the whole truth. The communications companies Dankner owns are the official reason, the antitrust reason that enabled him to present tough conditions if Dankner's company IDB group wanted to pursue the acquisition of the government's controlling interest in Bezeq.
But there is another reason to discourage the Dankners - a reason impossible to quantify in legal or economic terms. Allowing Nochi Dankner to take over Bezeq would have contributed enormously to the concentration of power in the hands of the few. IDB is already a multi-armed octopus; letting it take control of Israel's biggest telecom company would have made it the most powerful entity in Israel, second only to the government.
In that respect, we can quote a former antitrust commissioner, who morphed into a top personality at IDB and mediated Dankner's acquisition of IDB from the Recanati family: "Concentrating power in the hands of a few decision-makers could give them leverage over the nation's leaders, impairing the public's ability to monitor the conduct of the economic units and their managements, and worse - they could impair the very functioning of democracy." Well said, Yoram Turbowicz, in the foreword to the report forcing Bank Hapoalim to sell its non-banking assets. IDB with Bezeq would be a monster with influence comparable to Hapoalim's.
Yes, Dankner's withdrawal is bad for the tender. Until his departure, Dankner had been the most eager of all candidates. A fight between Dankner along with Ron Lubash's Markstone against both the Haim Saban and Apax combination as well as Benny Alagem's consortium could have been the best show in the history of Israeli privatization.
Front row to the fight
The fight might have been denominated in dollars, but it probably would have been a battle between monumental egos over prestige as well, which could have boosted the price to levels not seen in Israeli government selloffs. As Nochi, Haim, Ron and Benny duked it out, the public would have benefited.
But price is only one consideration when selling government companies. Introducing competition is more important, especially when it comes to telecommunications.
The horror scenarios being bruited about, that Saban, Alagem or some other pernicious foreigner might buy Bezeq only to dismantle it, bleed it dry, crush it and sell the bricks piece by piece are irrelevant. The State of Israel doesn't need foreign money or foreign currency; there is no difference between a dollar from a foreign investor or from a local one. What Israel's economy needs is competition, as much as possible.
Dankner has a problem to solve. He raised a billion dollars in bond issues and the interest is mounting. He badly needs good investments. But it is not the government's job to give them to him.
The politicians would do well to stay out, and leave negotiations with the Dankners of the business world in the hands of the professionals.
Of course, they could hold back this Bezeq business until the law allowing ministers to man top civil service positions with whomever they please comes into effect. Then they can replace the antitrust commissioner with a political figure of their choice, with whom real "business" can be done.
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