Related Articles
Top Stories
May 25 2012 19:13
Uncertainty over the future of the euro zone returned to push the rand down against the dollar.
May 25 2012 13:58
The costs of the first phase of the Gauteng Freeway Improvement Project have increased significantly to almost R90bn, according to a report.
May 25 2012 11:36
The JSE has identified and stopped "incorrect" trades from one of its members, and will reverse the trades and lower the session's total value after the close.
Durban - Mvelaphanda Group boss Yolanda Cuba went out of her way at a phone-in conference on Tuesday to emphasise that the planned acquisition of a major stake in Johnnic Communications was a "strategic investment".
She said it was aimed at unlocking shareholder value and because the media and entertainment part of the group was seen as an attractive long-term investment.
Mvela plans to buy just over 25% to 30% of Johncom from asset manager Allan Gray, which has significantly built up its holding in Johncom for client portfolios over the past couple of years.
There was no indication why Allan Gray had decided to sell - but given the strong performance of Johncom's share price over the past year it had probably overreached Allan Gray's value investment line.
Johncom CEO Prakash Desai indicated earlier this year that Johncom would be split, into a company housing the media and entertainment assets and the other essentially the holding in Caxton. Mvela is investing in the media business.
Cuba was also careful to distance the investment - expected to be in the region of R1,4bn - from any political ambitions owner Tokyo Sexwale might have.
Sexwale, though not yet definitely confirmed, has been giving strong indications recently that he might make himself available for leadership of the ANC and therefore a presidential candidate in 2009.
"From Mvelaphanda's point of view, we look at this as a financial investment, an asset we see as attractive from a long-term point of view." Cuba says her group will subscribe to Johncom's independence and freedom of speech.
She added Mvela had been talking to Johncom management about a possible deal for about two-and-a-half years. "One reason we are buying the business is because of management," she said.
Even so, if Sexwale does run for presidency having a controlling stake in a media group like Johncom - that includes the influential Sunday Times - could become a hot potato (see Finweek).
Cuba says increasing Mvela's holding beyond 30% is "something we will look at in the future". Regarding Caxton, earlier seen as a likely candidate to buy out Johncom, she says there's no reason to believe "commercial terms" between the two media groups will not continue, though once again she emphasised this depends on Johncom management.
Johncom shareholders did not approve the Mvela transaction, probably the reason it withdrew its cautionary announcement shortly before Mvela announced the possible acquisition.
Cuba won't say who these shareholders are - she also says possible empowerment partners that might come into the deal are not ANC partners.
- Fin24