Apax withdraws from Bezeq bidding

The UK private equity firm has withdrawn from the race to acquire a majority stake in the Israeli telecoms business in light of the country's political problems.

UK private equity firm Apax Partners has pulled out of the bidding to acquire a 50.01 per cent interest in Israel’s telecoms operator Bezeq Israel Telecom, citing the state’s uncertain political and security situation as reason for the withdrawal.

 

The Israeli government is seeking to relinquish majority control of the company and hopes to raise in excess of $1.5bn from the sale, making it the largest divestment in Israeli history.

 

Polar Investments, one of Apax’s rivals in the bidding process, has also withdrawn from the bidding, leaving Eurocom, Polar Investments and Kaul-Rosenne as the three remaining bidders. The Kaul-Rosenne consortium, which comprises former Bezeq Chief Executive Isaac Kaul and former Communications Ministry Director-General Danny Rosenne, is reported to have received financial backing from Spectrum Equity Investors, although the UK firm was unavailable for comment.

 

Following the withdrawals, the Israeli government has postponed the deadline for for firms seeking access to the company's data room until Novermber 7. Expressions of interest in acquiring the stake has originally been requested by today's deadline, with indicative offers to be submitted by November 15.

 

A spokesperson for Apax said that the firm was still exploring options for the business. 'We are still interested in acquiring the business and we will await developments with interest.'

 

Apax, which has seen little activity in buyout terms in the latter half of 2002, is considering joining a rival consortium in bidding for a majority stake in Bezeq, which holds a monopoly on local telephone services in the country.

 

The sale is the latest in a series of state-owned telecom sell-offs to be blighted. Last week, Advent International was named as bidder of choice by the Bulgarian government for the acquisition of BTC, although not before the government had considered shelving the sale due to the E200m offer for a 65 per cent stake being deemed too low. Similar problems beset the Czech government in its sale of incumbent operator Cesky Telecom, which eventually went to a consortium led by Deutsche Bank for E1.82bn.