Wiz CEO Assaf Rappaport’s group raises Reshet 13 offer to $120 million amid battle with Drahi
New bid underscores determination to remain in race despite signed term sheet with rival group.
The high-tech group seeking to acquire TV station Reshet 13 has improved its offer, adding a $20 million payment to the $100 million it had already pledged to inject into the channel over three years. The group, led by Wiz founder Assaf Rappaport, confirmed the revised bid on Monday evening, stating: “Our offer includes terms that are more favorable than Drahi’s offer.”
About two weeks ago, Reshet 13’s management announced that media mogul Patrick Drahi, who is considered close to Prime Minister Benjamin Netanyahu, would join as an investor in the channel. This followed weeks of negotiations during which controlling shareholder Len Blavatnik explored selling the broadcaster, despite the high-tech group having submitted what it claims was a superior financial proposal.
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Assaf Rappaport beside Reshet 13 offices.
(Photos: Vered Barequet / Shutterstock, Omer Hacohen)
As reported by Calcalist, Blavatnik opted to move forward with Drahi’s group after receiving indications that regulatory approval for that deal would likely be obtained more quickly than for a transaction with the high-tech group. A spokesperson for Blavatnik denied the report.
Drahi’s proposed entry into Reshet 13 has drawn criticism due to his control of the multi-channel television provider HOT and the news network i24NEWS. Critics argue that the deal could raise cross-ownership concerns and potentially result in the merger of Reshet’s news operations with i24NEWS, accompanied by staff layoffs. Additional concerns stem from the significant debt burden carried by companies within Drahi’s broader business empire.
Against this backdrop, Reshet 13 last Thursday requested approval to transfer a floating lien on its assets from Discount Bank to a company controlled by Drahi, a step that could facilitate a transfer of control while regulatory processes are still ongoing.
Earlier Monday, during a hearing at the Labor Court on a petition filed by employees of Reshet’s news division opposing the Drahi deal, the parties agreed that no change in the status quo would occur in the coming week. They committed to meeting next Monday and updating the court within three days. The channel’s management also undertook to inform both the court and the workers’ union within 24 hours of any material change. The judge formalized the agreement and scheduled another hearing for Thursday, March 12.
It has now emerged that the high-tech group has not withdrawn from the process and has submitted a significantly improved proposal, offering a total capital infusion of $120 million, including $45 million in the first year, even during the regulatory waiting period.
By contrast, Drahi’s offer reportedly includes an immediate $25 million investment in exchange for 14.9% of Reshet 13’s shares, along with a $10 million payment to Blavatnik structured as loan repayment. According to estimates, the deal framework would allow Drahi’s group to increase its stake to as much as 75% over time.
Sources close to the high-tech group said that regulators should refrain from rushing approval of Drahi’s proposal given the existence of a competing bid. They argue that their offer is financially superior and better aligned with regulatory requirements.
In a statement, the high-tech group said: “Our proposal provides immediate funding for the channel, includes more favorable terms than Drahi’s proposal, addresses regulatory concerns, prevents potential conflicts of interest under competition law, and enables the swift issuance of a control permit by the Second Authority. It also provides growth engines for the channel and is designed to bring Reshet to operational balance within three years.”
In response, shareholders of Reshet 13 stated that they are currently focused on the term sheet signed with Drahi’s group and are not conducting parallel negotiations at this stage.
