Cable & Wireless Plc is to double its stake in Israel’s state Telecom company Bezeq to 20% having won permission from the Israeli government. The international telco has been clamoring to get into the Middle East and plans to use Israel as a base, and C&W is making further moves to get stakes in Palestine telecoms authority Paltel, and it has growing operations in Lebanon, Yemen and Bahrain. However, the process will take some time as it must take place in two stages more than year apart. C&W is now allowed to increase it shareholding to 13% from its current 10.02% holding. In a second stage the company can increase the shareholding to 20% after a minimum of 18 months. Cable & Wireless has long expressed its desire to increase its holding from the 10% it bought in 1995, but negotiations were subject to the government’s concerns over state security. C&W said Israel’s Communications Minister, Limor Livnat, favored foreign investment entering the country to support privatization and liberalization. The move gives C&W the opportunity to gain a larger stake in the future, as the Israeli government is looking to sell off more of its 63% stake in the company and has placed 12.5% of the shares with Merrill Lynch for private placement, and planned a 11.6% public offering that has been postponed until the world stock markets stabilize. The only fly in the ointment is that the cautious Israeli government can block the sale to Cable & Wireless if it decides on an alternative international telco as major shareholder. But C&W is now free to further expand its stake by buying shares from the Tel Aviv Stock Exchange.
