The

Israel Corp.

will not serve as a surrogate buyer on behalf of government-controlled

Bezeq

for the 50%

Motorola

(MOT)

holds in

Pele-Phone Communications

, CEO Idan Ofer told

Ha'aretz

.

Poalim Communication

and

Gad Zeevi

are also likely to pass on the deal. Under Israeli regulations, any company owning half of Pele-Phone's stock is prohibited from trying to obtain control of Bezeq, when it is privatized.

Bezeq and Motorola equally own Pele-Phone and Motorola has been negotiating to sell its share and its other foreign cellular companies to the Spanish telco giant

Telefonica

(TEF) - Get Report

, but Bezeq has the right of first refusal.

Bezeq is concerned that if it directly acquires Motorola's stake in Pele-Phone, the company will be reclassified as a government entity. To avoid this, Bezeq is trying to persuade another company to acquire Motorola's stake for around $593 million, or half the originally estimated value.

Bezeq wants the buyer to give it the option to acquire the stake within four years, during which it hopes it will be privatized.

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