You can't accuse Nochi Dankner of lacking ambition. He likes to manage, from on high. It is wholly in character that he rejected the terms that Antitrust Commissioner Dror Strum stated for allowing IDB to buy the state\trolling interest in Bezeq, mainly the one banning Dankner and his IDB partner Yitzhak Manor from serving on Bezeq's board of directors. Strum effectively forbade them from participating in Bezeq's management and helping create its policies.
So Dankner said no thanks and announced that IDB was withdrawing from the contest for the phone company. Since Dankner was the most ardent candidate in town, his withdrawal could potentially do great harm to Israel's biggest privatization tender.
Two contenders remain: the Apax-Saban group and Benny Alagem's consortium. But two is not as good as three, especially when the defunct third was the most vigorous of the lot. It is entirely possible that, with Dankner's departure, the Bezeq tender will stagger into the same kind of trouble as the Israel Discount Bank sale, where the state was left with a single contender. The result is not an auction: it's a negotiation with the seller's back to the wall.
Dankner's withdrawal therefore poses actual, direct and clear damage to the Bezeq tender, to the potential future management of Israel's biggest phone company, and to the State of Israel in general. The damage is material and inevitable. The terms Strum imposed, including that Dankner must sell his 25 percent Cellcom stake within less than 18 months, were terms that the businessman had to reject.
It is deliberate
In practice, the terms Strum dictated were to a large degree an elegant way to oust Dankner from the Bezeq tender. The damage is therefore not incidental. It is a matter of deliberate policy.
Why did he do it? Because Strum knows there's more to the issue than maximizing the state's income from selling its Bezeq shares, or having as many bidders as possible - and we may assume that if he bought Bezeq, Dankner would have instituted revolutions there.
For instance, is it really in Israel's interest for the biggest holding company in the land - a company with a market cap of almost NIS 8 billion, that owns Clal Insurance, the mutuals giant Ilanot Discount, real estate empires Azorim Investment, Development & Construction and Property & Building Corporation, the biggest of the supermarket chains, Super-Sol, the cement monopoly Nesher, American Israeli Paper Mills, and 25 percent of Cellcom - should this sprawling octopus own the national phone company, too?
Strum couldn't just shoo Dankner away by saying no. He had to focus on areas where buying Bezeq would impair competition, namely, IDB's telecommunications holdings. The biggest is, of course, Cellcom, which competes with Bezeq directly and with its cellular subsidiary Pelephone Communications.
While Strum looks at competition, the State of Israel can take the broader view, looking at the development of focuses of power.
A decade ago, the David Brodet commission forced the banks to divest their controlling interests in nonbanking corporations, though they were allowed to retain up to 20 percent of such companies. The idea was to weaken their overwhelming power, and it worked. But since then, new power hubs have developed, and IDB is the biggest of the lot. It is arguable that the state should not lend a hand to making it even more powerful.
This wouldn't be the first time the state has given Nochi Dankner the cold shoulder when he came forward, wallet in hand. He had wanted to contend for Israel Discount Bank (TASE: DSCT), even though he already owned Clal Insurance. Straight out, Bank of Israel Governor David Klein said no.
Strum is no Klein, it appears. He can't say no straight out. Instead, he delivered his refusal by handing down impossible terms. It was not as elegant as Klein's method, but it was just as justifiable.
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