“Sharon wants to close the circle at Bezeq, he comes with tremendous motivation”

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Bezeq’s board of directors will convene this afternoon to approve the addition of Gil Sharon to the company and his appointment as chairman in place of Shlomo Rodev. As revealed on the Calcalist website on Thursday, the investment fund Cercelite and David Forer, the controlling shareholders, chose Sharon, who was the leading candidate .

Searchlight was looking for a chairman for Bezeq with a background and experience in the field of communications. Sharon, who matched the foundation’s DNA, is a much more comfortable figure than Radov, an excellent strategist and cold and aggressive in his considerations. The goal set for him is clear – to implement the strategic plan that Bezeq decided on in Rodev’s days. This includes two essential clauses: completing the fiber optic outline and dealing with the fifth generation tender.

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Both of these challenges are expected to overwhelm Bezeq. Searchlight, a fund that works to improve the companies it acquires and sell them at a profit, paid for the control of Bezeq only NIS 630 million, together with Forer. They own 74% of Bezeq’s parent company (26.3%), B-Com. Sharon comes from the communications company Golan Telecom, where he served as chairman and CEO, and he led its sale to competitor Cellcom for more than NIS 600 million, a move that should be perfect in the coming days. The model of improving the company, which Elco bought from the Zalkind family for NIS 350 million, was one of the significant considerations in choosing Sharon for the position. He himself received 10% of the company’s shares upon his appointment and will register an exit of NIS 70-60 million.

Like Rodev, Sharon was already a wealthy man, and he could have started a new career as an independent businessman. But he has other plans. “He really wanted the job at Bezeq and said that for him it was closing the circle. His motivation to succeed is enormous,” said a source close to the contacts made with him. Closing the circle refers to the main role that Sharon played in his career – his tenure as CEO of Pelephone in 2015-2006. Along with many professional achievements, his term will also be remembered as a struggle with employees. During his time, Pelephone employees established the first committee in the cellular industry.

Gil Sharon Photo: Uriel Cohen

The committee marked Sharon as a target

The Pelephone management, led by Sharon, led a strong struggle against the organization. 100 days of labor dispute and nearly 30 days of strike eventually led to the required signature of a third of the company’s 4,000 employees on joining the Histadrut. The committee marked Sharon as the target of the protest, and not the then controlling shareholder, Shaul Alovich. They documented themselves chasing the CEO’s wife, and even posted pictures on the network showing the couple’s alleged neighbors holding signs that read “Gil Sharon, the neighbors are ashamed of you.”

The antagonism aroused by Sharon stemmed from his arrogant nature and methods of struggle in the committee. He will be remembered as the one who set up a special elevator in the Pelephone building that will lead to the office of the CEO and VPs – without stopping on the employees’ floors; The pressure exerted by management on employees not to unionize; In an attempt to establish an internal committee to oppose the incorporation; And in towing vehicles of workers from their home on strike, though question included their personal belongings.

The workers’ committees of Bezeq and its subsidiaries Pelephone, Yes and Bezeq International apparently accepted the current appointment with some concern. Sharon left Pelephone in favor of the position of CEO of DSK, but public pressure and opposition from minority shareholders to the salary promised to him by the controlling shareholder Eduardo Elstein, NIS 75 million for five years, led to Elstein’s folding. Sharon settled for compensation of NIS 2 million.

During his tenure at Golan Telecom, when Elstein and DSK decided to try to buy Bezeq, Sharon made initial contacts to make a deal opposite to what is happening these days – and asked Golan to buy Cellcom. During these talks, Sharon said that Bezeq is a kind of gold mine, Proper efficiency and cost cutting can lead to good results and a good return on investment. It is not impossible that this is also his perception today. The company has agreements anchored with its workers’ committees, but last February the board torpedoed a new wage agreement introduced by the committee.

Rodev supported the agreement, but Circlelight and other directors voted against it. Searchlight will push for efficiency, and Sharon will be the one to lead it, even at the cost of retiring more employees. It will be a difficult challenge for him, given his difficult experience with committees in the previous term. The committee will not make life easy for him by signing the next employment agreement with Bezeq.

These were not Rodev’s only disagreements with Circlelight. Rodev believed that Circlelight’s 74% holding of Beecom, which in turn holds 26.3% of Bezeq, gives it only partial control; And that the role of the board of directors is to take care of the interests of the other Bezeq shareholders. As a result, he prevented several decisions that Searchlight sought to pass, including amending regulations to the Ministry of Communications’ requirement regarding the method of appointing directors in the company. Eventually he gave up and retired. It is not clear what Sharon’s position is on these issues, but it is likely that he was chosen for the position also because he chose to align with Sercelight’s goals.

Introduction to the CEO

Sharon comes as chairman of the board, a completely different kind of job from a CEO. His other confrontation concerns the relationship with Bezeq’s senior management, most of whom he already knows. Dudu Mizrahi, CEO of Bezeq, served as Bezeq’s CFO during Sharon’s time as CEO of Pelephone; Ran Guron, CEO of Alpha – the merger led by Rodev between the subsidiaries Pelephone, yes and Bezeq International – worked under Sharon during his time as CEO 013. Of the two, it seems that Goron was the one who was more satisfied with the appointment.Mizrahi tends to be overly independent in his role as CEO, and did not always align with Rodev, although Rodev was the one who appointed him. However, he and Sharon do not know each other professionally and have never worked together, so Sharon’s minimal familiarity with the linear field can be an advantage for Mizrahi. On paper at least there is a considerable adjustment in the economic vision of Mizrahi and Sharon.

Sharon joined Bezeq at an ideal time for him. Rodev cleared the table, deleting the value of the subsidiaries and Bezeq’s tax asset worth NIS 1.2 billion from yes after it could not be realized. During his tenure, Bezeq agreed to promote reforms in landline telephony and to promote agreements regarding the layout of the optical fibers.

The Ministry of Communications is also blowing new winds of readiness for regulatory relief for the company. Although the inter-ministerial team recommended to the Ministry of Communications not to approve the abolition of the structural separation in the company at this stage, it did discuss the provision of relief. The issue of structural separation will soon reach the High Court, in accordance with Bezeq’s petition, and its abolition will be another significant challenge for Sharon.

Sharon’s experience in the field of communications is almost exclusively in the field of cellular. Therefore, he also faces the obligation to study the other areas of society. He will face a difficult board, which includes members no less experienced than him in the business sector and even in the field of communications, including David Granot, the interim chairman, and Amnon Dick, who managed Bezeq. To run such a board also requires political skills that Rodev did not necessarily It is clear if Sharon has them, he will need extra caution and a minimum of pulling from the waist to be successful.

In fact, Sharon will serve as interim chairman because his appointment requires the approval of the general meeting, which will be convened only after the next two annual reports. In the meantime, the new chairman will need patience. It is possible that the five intense years that have passed since he retired, the affair that has run aground with DKS and especially the new wealth in his pocket, will make Bezeq Gil Sharon much less smug, and much calmer.

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