The fate of Channel 10, the financially ailing television broadcaster, hung in the balance on Tuesday after one potential buyer dropped out of contention and a second said he was reconsidering his offer.
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The setback comes as the broadcaster faces a life-and-death deadline to recruit new investors and provide the government with some 45 million shekels ($11.6 million) in guarantees to qualify for a new license. Its current license expires at the end of June, but to get a new one it has to meet the condition by the end of this month.
On Tuesday afternoon, however, RGE Media – whose shareholders include the U.S. billionaire Len Blavatnik – said it was no longer interested just days after meeting with Prime Minister Benjamin Netanyahu on the subject. Hours later Ilan Shiloah, an Israeli high-tech and communications entrepreneur and investor, said he was reconsidering his bid.
“Despite our interest to buy Channel 10, which has taken steps to improve efficiency and has much improved its business its heavy debt, new regulatory requirements and regulatory uncertainty, worry our board,” said RGE CEO Mudi Friedman, the latter apparently a reference to Netanyahu’s role.
Shiloah also blamed Netanyahu for his decision. In a Twitter post, he said the prime minster ”had worked to keep investors away” from the broadcaster. Another source close to the negotiations said, “Everyone was being pressured by Netanyahu and decided to pull back.”
Netanyahu has said in the past that Channel 10 routinely gave him unfavorable coverage and during the general election this year he declined to be interview by the broadcaster’s journalist Raviv Drucker, who exposed the so-called “Bibi Tours” affairs in which Netanyahu was accused of improperly accepting free flights from wealthy individuals while he was out of office in the late 1990s and early 2000s.
In the past, he had tried to block extending the broadcaster’s license.
“We have no idea what’s going on right now,” said a source close to Channel 10’s current shareholders. “We do know that they won’t extend our license, but we need more time.”
At the end of last year, Yossi Maimon, Channel 10’s current controlling shareholder, signed an agreement with Shiloah giving him rights of first refusal to buy control. In March, Shiloah said he planned to exercise those rights after conducting due diligence that showed the station has about 150 million shekels in debt.
Under the agreement, Shiloah would have injected 120 million shekels into Channel 10 to cover debts and provide it working capital. Maiman and a second shareholder, the Israeli-American movie producer Arnon Milchan, would lose their stake and receive no money in return.
Meanwhile, the Second Television and Radio Authority, which regulates commercial broadcasters, ruled that Channel 10 was qualified for a renewed 15-year license, which lifted a cloud of uncertainty over the broadcaster’s future and aroused the interest of investors.
RGE, whose other shareholders include Aviv Giladi and the Recanati family, also entered into talks to buy Channel 10 under terms that included a 70 million-shekel payment to existing shareholders. RGE executive met with Channel 10 Monday night without agreeing to terms.
Sources said that Channel 10’s shareholders would try to convince Shiloah to buy them out under better terms. While they may also try to extend its license again, the Second Authority’s chairwoman, Eva Madjiboj, has she wouldn’t support such a move.