Blavatnik Increases Stake in RGE Media Group

Russian-American business tycoon Leonard "Len" Blavatnik has exercised an option to increase his interest in the privately-held media company RGE Group to 33%. The transaction equates his stake with that of the other shareholders, businessmen Oudi Recanati and Aviv Giladi.

Until now, Blavatnik has owned 20% of RGE, which has the controlling interest in NOGA Communications. He bought the shares through his business group Access Industries in 2008.

NOGA produces and operates four Israeli television channels, one being the popular Children's Channel. The others are the Documentary Channel 8, an educational children's channel called Logi, and the Sports channel.

While financial details of the transaction were not made public, industry observers believe Blavatnik bought the additional shares in RGE Group at a company value in the range of $50 million to $60 million. Most of the money will be going to Giladi, who is selling the greater part of the shares passing to Blavatnik.

Blavatnik has been looking around Israel for business opportunities for years, but has evidently been in no rush. In August 2008, he almost closed a deal to buy a major interest in the publishing company Maariv Holdings from the Nimrodi family, but backed out during the due diligence stage.

In late 2009, he considered buying out Shaul Elovitch's shares in the satellite television company Yes. Elovitch owned a minority 32.6% stake in Yes through his company Eurocom. But meanwhile, Elovitch wound up buying Yes' parent company, Bezeq.

Another deal that Blavatnik considered, and has thus far rejected, was buying Israel's Russian-language television network, Channel 9.

Industry observers surmise that his decision to expand his holdings in the content company RGE Group means Blavatnik has decided to forgo buying shares in Yes.

The billionaire's taste for media companies isn't confined to Israel. Just last month, a plan to invest in the California company Metro-Goldwyn-Mayer came to light. The Hollywood studio company has been in financial straits, and its potential buyers have included Time Warner, Lions Gate Entertainment and Blavatnik's Access Industries - whose offer involved an equity infusion and help in restructuring the company's $3.7 billion debt, Reuters reported in March.

But MGM didn't appreciate the lowball bids it received from these bidders. So the auction totters on, and meanwhile, another company has thrown its hat into the ring: Relativity Media.

As for the RGE deal, a spokesman for Blavatnik commented on Wednesday that since Access got into the group, it has been "impressed by the dynamism and quality of the management, its productions, and its commitment to its status in the Israeli television market."