Reshet in Talks With Channel 10 Over Merger

Tie-up would come as TV industry readies for era of more intense competition.

Alon Ron

Reshet – one of the two franchisees of Channel 2 television – is in talks to buy rival Channel 10, as the broadcast industry readies itself for an era of more intense competition.

TheMarker has learned that Udi Angel and the Ofer family, who control Reshet, are in advanced negotiations with the RGE group, which controls Channel 10, about merging the two entities. They have met with Udi Recanati, one of RGE’s shareholders, at least once to advance the plan.

The deal would leave Angel, who controls 51% of the much bigger Reshet operation, as controlling shareholder of the combined broadcaster. However, sources said the talks have snagged over valuing the two companies, which would affect how much of the merged entity Angel would own.

The talks come ahead of a government-ordered shake up of Israel’s TV industry. Reshet and the other Channel 2 franchisee, Keshet, have been sharing airtime on Channel 2, but as of November each will be airing programming seven days a week.Industry executives are skeptical that there is enough advertising revenue to support them all.

Channel 10 has been the smallest and weakest of the three. When RGE bought control of it in 2015, it paid the sellers just 10 million shekels ($2.6 million) and injected another 140 million shekels into the station to keep it afloat.

In 2013, Reshet brought in the global media company Endemol as a shareholder with a 33% stake, at a 300 million-shekel valuation for the business. But Reshet has been struggling with debt and Angel is seeking a new, investor.

One candidate is the Hollywood producer Arnon Milchan, who has a 10% stake in Channel 10 and is close to Prime Minister Benjamin Netanyahu. Milchan has been named in a police probe of gifts to the prime minister.