Searchlight makes offer to buy Internet Gold’s B Communications shares

By Caroline Salls

Pittsburgh, May 14 – Searchlight Capital Partners made an updated proposal to purchase Internet Gold – Golden Lines Ltd.’s shares in B Communications Ltd. (BCom), according to a filing made Tuesday with the Securities and Exchange Commission by B Communications.

According to the proposal made Monday, Searchlight would invest NIS 260 million into BCom at closing as a primary equity issuance.

Concurrent with the closing, an additional NIS 70 million equity offering would be made to existing BCom equity shareholders at the same terms as the Searchlight investment, including NIS 35 million for Internet Gold and NIS 35 million for BCom minority shareholders.

Searchlight will provide a fully committed backstop for up to NIS 35 million not subscribed by the BCom minority shareholders.

The price of the BCom equity issuance to all participating investors, namely Searchlight and Internet Gold, would be the lesser of NIS 4.80 per share and a 25% discount to the 30-trading day volume-weighted average price of BCom on the date of signing.

As a result of the proposed transaction, Internet Gold would elect to receive 100% cash from Searchlight in lieu of a BCom share option as provided for in an April 13 Internet Gold offer.

Searchlight would deliver to Internet Gold a total of NIS 225 million of cash proceeds for its 19,363,396 shares of BCom, and Internet Gold would no longer have the right to elect to receive NIS 60 million of BCom equity.

Internet Gold would invest NIS 310 million of cash into BCom in addition to the NIS 35 million of new equity invested by Internet Gold into BCom in exchange for a new NIS 310 million tranche of series C debentures, which will be issued at par.

The series C debentures would have identical terms as the existing series C debentures, with the only exception being that the new debentures will have no amortization payments until maturity in November 2024.

A total of NIS 840 million of BCom cash would be used to redeem NIS 226 million of series B debentures and pay down NIS 614 million series C debentures.

The series C debentures will carry an interest rate of 3.85%.

BCom said the trustees for the series B and series C debentures will present the offer for a bondholder vote, the results of which must be made available to Searchlight by May 17.

Internet Gold is a telephone and internet provider based in Ramat Gan, Israel.

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