Wiz founders Rappaport and Costica to finance Reshet 13 acquisition alone after other investors drop out
The other entrepreneurs initially named as backers did not ultimately transfer funds for the acquisition, leaving Rappaport and Costica to finance the deal and its planned $120 million capital injection.
Financing for the acquisition of Reshet 13 will come solely from Wiz founders Assaf Rappaport and Yinon Costica, after other investors who had been in talks to finance the acquisition ultimately decided not to participate in the deal.
In March, a group of high-tech entrepreneurs led by Rappaport agreed to acquire control of Reshet 13. The acquisition is not being carried out directly by the financiers. Instead, the funds earmarked for the deal are being transferred to the Merit Foundation, a public-benefit company (PBC) that will hold the shares and control of the channel.
When the acquisition agreement was announced, it was stated that, alongside Rappaport and Costica, high-tech entrepreneurs from prominent companies such as Wix, monday.com and Riskified would also participate in financing the deal. However, the group now says that the other entrepreneurs never transferred money to the Merit Foundation for the acquisition. Rather, there were preliminary discussions with them that did not ultimately result in funding for the transaction.
As a result, the deal, which includes a commitment by the investors to inject $120 million into Reshet 13 over three years, will be financed entirely by Rappaport and Costica.
The Second Authority Council is currently reviewing Reshet 13's request for approval of the transaction. As part of the review, the regulator requested information about which investors had transferred funds to Merit that would be used to finance the acquisition.
Merit informed the regulator that it had received acquisition funds from only two investors: Rappaport and Costica. Funds transferred to Merit on behalf of other parties are intended for other purposes and will not be used to finance the acquisition.
The regulator is expected to complete its review of the transaction soon. The process includes an examination of the deal's financing and the identities of its sponsors.
The Second Authority Council's review is taking place against the backdrop of a contentious government decision in July stating that it would not recognize decisions, approvals, appointments or other actions taken by the council as long as it does not meet the statutory threshold conditions set out in law.
The decision followed a June 17 Supreme Court ruling that reinstated the previous government's Second Authority Council, even though the number of serving members had fallen below the minimum threshold stipulated by law.
The government's refusal to recognize decisions by the council could create a constitutional conflict, particularly if the regulator approves the Reshet 13 transaction and the government subsequently refuses to recognize that approval.
