Johannesburg - The Public Investment Corporation (PIC) has
decided not to support the buyout of Avusa by the Times Media Group, it was
reported on Tuesday.
PIC, a 17% shareholder in Avusa, said as a "concerned
shareholder" it was worried about Avusa's underperformance, Business Day
The company's chief investment officer Daniel Matjila said
at a meeting on July 19 the state pension fund manager's investment committee
resolved not to support the buyout.
He said if the turnaround resources were already available
to Avusa, the deal was not needed, according to the newspaper.
Matjila pointed out that Times Media director Andrew
Bonamour was already a member of the Avusa board and, with CEO Colin Cary, a
facilitator of its turnaround plan.
"Whilst the structure, post the deal, results in a
significant reduction of Mvelaphanda's shareholding, the perceived collaboration
between Blackstar, Mvelaphanda and Universal Hirt & Carter results in this
block of shareholders owning more than 33% of the business and thereby
rendering them the controlling shareholders," Matjila was quoted as
"This business underperformed with Mvelaphanda being
one of the significant shareholders, and therefore their continued influence
via this controlling block is of concern to the PIC."
The new Companies Act allows shareholders with more than 15%
of voting rights to vote against a deal, and to approach a court to set aside
resolutions approving it.
Times Media Group was formerly known as Richtrau, an
Mvelaphanda unit with shares in Avusa. It has already won 65% of shareholder
backing for its R24 per share offer for Avusa stock.
Shares of Avusa were flat at R23.25 at 08:26 GMT, while
Mvelaphanda shares were untraded.
The All-share index, the widest measure of South African
stock performance, was little changed.