In a move that could end one of Israel’s oldest media dynasties, the French-Israeli telecoms tycoon Patrick Drahi is reportedly in advanced talks to buy control of the Yedioth Ahronoth publishing group.
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Under the terms of deal reportedly being discussed Drahi, who controls Netherlands-based multinational telecoms company, Altice, would initially buy the 34% in the Yedioth group controlled by the bankrupt tycoon Eliezer Fishman and shares of other smaller shareholders, including members of the Mozes family.
At a later stage, Arnon Mozes, who controls a 24% bloc of the publishing group and runs it, would sell his shares. None of the parties to the sale would comment on the reports or responded by press time.
Drahi’s acquiring control of Yedioth would mark a sea change in the Israel media landscape. The Mozes family has controlled the newspaper – Israel’s largest – since the late 1930s, not long after its founding. Arnon (Noni) Mozes has led the group since his father was killed in an automobile accident in 1985 and has long used it to wield power in politics and business.
Although the Yedioth group remains Israel’s biggest, encompassing the popular Ynet websites as well as a staple of magazines, the newspaper has come under pressure from declining print advertising and competition from the Sheldon Adelson-backed giveaway daily Israel Hayom.
Mozes has been seeking a buyer for some time without success and to add to his problems he has been ensnared in the Case 2000 police investigation, in which taped conversations allegedly show he sought to reach a deal with Prime Minister Benjamin Netanyahu involving friendlier coverage of Netanyahu in return for the passage of legislation that would hurt Israel Hayom.
The conversations also showed Netanyahu offering to help find a buyer for Yedioth, among them Larry Ellison, co-founder of the U.S. software company Oracle, and James Packer, scion of an Australian media dynasty and a friend of Netanyahu’s.
In any case, Fishman’s stake in the publishing group is on the block. The stock was pledged to Bank Hapoalim against a 1.1 billion shekel ($310 million at current exchange rates) loan Fishman took to buy the stake 20 years ago and the bank is eager to sell the shares.
However, observers say the Yedioth group is nowhere near the $800 million valuation at which Fishman acquired his stake.
Mozes had reportedly conducted talks over the past year with an unnamed foreign investor that ultimately collapsed but had valued the group at 1 billion shekels. The talks fell through because the buyer regarded even that valuation as excessive.
Drahi has long seen a strategic link between telecoms infrastructure and content. In addition to the cable television and other properties Altice has in Europe – and a bid it is now making for the U.S. cable broadcaster Charter Communications – it also controls the French daily Liberation and newsweekly L’Express. In 2015, it bought NextRadioTV.
In Israel, Altice owns Hot Telecom, the cable television monopoly. Right now that creates a problem for Drahi because Israeli law bars media crossholdings. The rule won’t prevent Drahi from completing the first stage of the Yedioth acquisition, but unless the law is changed or Drahi finds a creative way of circumventing it, he won’t be able to secure control of the group.