Elliott Welcomes Bezeq’s Governance Overhaul
Elliott Advisors (UK) Limited (“Elliott”), which advises funds that collectively comprise one of the largest shareholders in Bezeq The Israeli Telecommunication Corporation Ltd. (“Bezeq” or the “Company”), today sent a letter to Bezeq’s newly appointed Board Chairman Shlomo Rodav, sharing its views on Bezeq’s governance transformation and proposing that the Company consider a share buyback programme.
Elliott’s letter highlights the poor corporate governance that persisted at the Company over a number of years, leading to an Israel Securities Authority investigation, and a number of board members and executives being placed under house arrest and barred from the Company. Culminating in last week’s election of Chairman Rodav, the Company’s refreshed Board brings much needed independence and experience.
Now that the long overdue governance overhaul has been achieved, Elliott recommends that the following action items be undertaken without further delay: (i) appoint a new CEO; (ii) rebuild a constructive regulatory dialogue; (iii) develop a coherent new strategy for the business balancing growth with efficiency gains; (iv) review shareholder distribution policy, immediately seeking authorization to buy back shares and consider implementing a buyback programme when appropriate; and (v) conduct robust domestic and international engagement with shareholders, clearly communicating a plan to create value.
Elliott’s letter is latest in a series of communications with the Company this past year, and follows up on recent conversations with Chairman Rodav and other members of Bezeq’s board.
Full text of the letter can be read below.
Elliott Management Corporation manages two multi-strategy funds which combined have approximately $35 billion of assets under management. Its flagship fund, Elliott Associates, L.P., was founded in 1977, making it one of the oldest funds of its kind under continuous management. The Elliott funds’ investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, and employees of the firm. Elliott Advisors (UK) Limited is an affiliate of Elliott Management Corporation.
May 17, 2018
|Mr Shlomo Rodav|
|Bezeq The Israel Telecommunication Corporation Ltd.|
|The Triangular Tower|
|3 Azrieli Center|
|Tel Aviv 61620, Israel|
|Attention: Shlomo Rodav, Chairman of the Board of Directors|
Dear Mr Rodav,
We appreciate our recent phone conversations about the future of Bezeq The Israel Telecommunication Corporation Ltd. (“Bezeq” or the “Company”). As the funds we advise are (collectively) one of Bezeq’s largest shareholders, we want to reiterate our optimism at your appointment as Chairman of the Board of Directors. Bezeq has undergone a major governance overhaul in recent months, providing a foundation for you and a new leadership team to drive shareholder value. We are writing today to offer our views on the importance of these governance changes and to propose that the Company consider supporting shareholder value by implementing a share buyback programme. Shares could be acquired from the market or, if feasible, from the Eurocom Group. To facilitate this, we believe Bezeq should immediately seek authorisation to acquire up to 10% of its shares, which would allow the Company to opportunistically buy back shares when appropriate.
Over the past year, Bezeq has operated under extreme uncertainty, with a lack of clear leadership and strategic direction, poor investor communications, and a stalled regulatory dialogue. These interrelated problems stemmed from the poor corporate governance that persisted at the Company over a number of years. This led to an Israel Securities Authority investigation and a number of board members and executives being placed under house arrest and barred from the Company. This has all occurred at a time of accelerating competition and change in the Israeli telecom market.
We are encouraged by the progress made in normalising Bezeq’s corporate governance. Following the AGM, and your subsequent election as Chairman, we believe that Bezeq now has a much improved Board of Directors. In contrast to when we first began our engagement with Bezeq, the Company’s refreshed Board is independent and brings experience of the Company itself and the Israeli telecom market as well as the management and governance of large companies. Having spoken with you and a number of your fellow directors, we are encouraged by your commitment to work collectively for the benefit of Bezeq and all its stakeholders without bias toward any shareholder who nominated you.
Valuation and Share Buyback
We continue to believe that Bezeq is fundamentally a well-positioned and resilient business, where—following a sustained period of poor governance and management—a new leadership team can drive performance improvements and rebuild shareholder value. Bezeq’s shares, in our view, are currently trading well below their fundamental value on multiple dimensions. Bezeq has one of the highest equity free cash flow yields (~11%) of any incumbent telecom company in the EMEA region. This yield is based on the 2018 earnings and cash flow, which we believe is likely to be a low point, reflecting the pricing initiative taken at Yes earlier this year, but none of the anticipated cost savings from combining Yes and Bezeq International. This also neglects the likely growth and efficiency initiatives that may be pursued by a new team. The shares trade well below the discounted cash flow valuations of every sell-side analyst covering the stock.
This discount to fundamentals implies that it would be accretive for Bezeq to buy back its own shares. This could be funded by the ~ILS 500m proceeds from the Sakia real estate disposal and by modest incremental borrowings, appropriately sized to avoid impacting Bezeq’s credit rating or significantly affecting borrowing costs.
Now that the governance problems at Bezeq have been resolved and a new Board of Directors is in place, it is imperative that the following steps be taken without further delay:
(i) Appoint a new CEO;
(ii) Rebuild a constructive regulatory dialogue;
(iii) Develop a coherent new strategy for the business balancing growth with efficiency gains;
(iv) Review shareholder distribution policy including immediately seeking authorization to buy back shares and consider implementing a buyback programme when appropriate; and
(v) Conduct robust domestic and international engagement with shareholders, clearly communicating a plan to create value.
Bezeq’s new Board should be well positioned to effectively govern the company in the interest of all shareholders. We appreciate your leadership in this new phase for Bezeq, and look forward to our continued dialogue.
Elliott Advisors (UK) Limited
For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.
Tilaa tiedotteet sähköpostiisi
Haluatko tietää asioista ensimmäisten joukossa? Kun tilaat mediatiedotteemme, saat ne sähköpostiisi välittömästi julkaisuhetkellä. Tilauksen voit halutessasi perua milloin tahansa.
Lue lisää julkaisijalta Business Wire
Abu Dhabi to Host Interfaith Alliance For Safer Communities: Child Dignity in the Digital World Forum on 19 November17.11.2018 16:40 | Tiedote
Held under the patronage of His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, the UAE will host the first edition of the Interfaith Alliance For Safer Communities Forum on November 19-20 in recognition of the country’s leading role in promoting tolerance and interfaith dialogue. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181117005008/en/ His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces (Photo: AETOSWire) The forum will host 450 guests including religious leaders, NGOs and heads of industry to discuss ongoing social challenges and develop comprehensive solutions for protecting youth from cybercrime. The Interfaith Alliance For Safer Communities Forum is an expansion of the Child Dignity in the Digital World Congress which was held in October 2017 in the Vatican, an
Philip Morris International and Dorna Switch Gears in Quest for a World without Tobacco Smoke17.11.2018 14:00 | Tiedote
Philip Morris International Inc. (PMI) (NYSE:PM) and Dorna Sports S.L., the commercial rights holder for the world FIM MotoGP Championships, have extended their partnership until the end of 2021. The two organizations have collaborated successfully for 26 years. As of 2019, the partnership will focus on advancing the cause of a smoke-free world. More than 1 billion people smoke today and, according to the World Health Organization, will continue to smoke in the near future. PMI has committed to transform its business and encourage all men and women who would otherwise continue smoking to replace cigarettes with better alternatives as soon as possible. With around 350 million MotoGP fans worldwide, MotoGP can play a significant role in positively impacting the lives of people who smoke and those around them. “The best choice for consumers concerned about the health risks of smoking is to quit tobacco and nicotine altogether. Today, however, technology, science and innovation provide a r
Schlumberger Announces Fourth-Quarter and Full-Year 2018 Results Conference Call16.11.2018 21:00 | Tiedote
Schlumberger Limited (NYSE:SLB) will hold a conference call on January 18, 2019 to discuss the results for the fourth quarter and full year ending December 31, 2018. The conference call is scheduled to begin at 8:30 am US Eastern time and a press release regarding the results will be issued at 7:00 am US Eastern time. To access the conference call, listeners should contact the Conference Call Operator at +1 (800) 288-8967 within North America or +1 (612) 333-4911 outside of North America approximately 10 minutes prior to the start of the call, and ask for the “Schlumberger Earnings Conference Call.” A webcast of the conference call will be broadcast simultaneously at www.slb.com/irwebcast on a listen-only basis. Listeners should log in 15 minutes prior to the start of the call to test their browsers and register for the webcast. Following the end of the conference call, a replay will be available at www.slb.com/irwebcast until February 18, 2019, and can be accessed by dialing +1 (800)
Visa Strengthens Commitment to Growing Digital Payments in India16.11.2018 17:33 | Tiedote
Visa (NYSE: V) today announced a minority investment in BillDesk, a leading platform for online payments and bill payments in India. Visa’s investment and collaboration will help BillDesk develop new product lines for its payments and loyalty businesses and also expand its footprint into other geographies. The investment will be subject to necessary statutory approvals and is expected to have no direct bearing on Visa’s existing Indian business. “As a leading payments player in India, BillDesk has been a long time business partner to Visa. Having worked with BillDesk’s founders over the years, the Visa leadership has been consistently impressed with their vision, market knowledge and execution capabilities, as well as alignment on values. This investment further reinforces our long-term commitment to India’s digital payments growth story,” said Asia Pacific regional president, Chris Clark. “We are truly excited by this investment from the world's largest global payment network, Visa. W
Guidewire Enhances PartnerConnect Consulting Program with Addition of Product and Regional Specializations16.11.2018 16:55 | Tiedote
Guidewire Software, Inc. (NYSE: GWRE), provider of the industry platform Property and Casualty (P&C) insurers rely upon, today announced the addition of specializations to its PartnerConnect Consulting program. Specializations have been added to aid insurance companies in selecting the best partner to lead or staff their Guidewire projects. Guidewire unveiled new specializations, including two which have been successfully piloted earlier this year. “Our customers will now have more clarity and information as to which partners have the proven capabilities in their chosen product and region,” said Lisa Walsh, vice president, Alliances, Guidewire Software. “Adding these specializations will also allow us to have more insight into a partner’s performance and competencies.” To earn a specialization, partners need to demonstrate skills, knowledge, and competency in a specific Guidewire product or solution by certifying staff at multiple levels (specialist and professional) through Guidewire’
Janssen receives positive CHMP opinion for ERLEADA™ (apalutamide) for patients with non-metastatic castration-resistant prostate cancer who are at high risk of developing metastatic disease16.11.2018 16:15 | Tiedote
The Janssen Pharmaceutical Companies of Johnson & Johnson today announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has issued a positive opinion for apalutamide, a next generation oral androgen receptor inhibitor for the treatment of adult patients with non-metastatic castration-resistant prostate cancer (nmCRPC) who are at high risk of developing metastatic disease.2 The CHMP’s positive opinion will now be reviewed by the European Commission (EC), which has the authority to grant approval for the use of apalutamide. The CHMP’s positive opinion is based on data from the pivotal SPARTAN Phase 3 clinical study which assessed the safety and efficacy of apalutamide versus placebo in patients with nmCRPC who have a rapidly rising prostate specific antigen (PSA) level despite receiving continuous androgen deprivation therapy (ADT). The SPARTAN clinical study showed that apalutamide, when added to ADT, significantly reduced the risk
Uutishuoneessa voit lukea tiedotteitamme ja muuta julkaisemaamme materiaalia. Löydät sieltä niin yhteyshenkilöidemme tiedot kuin vapaasti julkaistavissa olevia kuvia ja videoita. Uutishuoneessa voit nähdä myös sosiaalisen median sisältöjä. Kaikki STT Infossa julkaistu materiaali on vapaasti median käytettävissä.Tutustu uutishuoneeseemme