- March 3, 2004
- Posted by: admin
- Category: Media & Broadcasting
Johannesburg – South Africa’s airwaves are zinging with Primedia snapping up shares in the all-hit station, 94.7 Highveld Stereo.
Following bun fights in the market for the radio assets of New Africa Investments Limited (Nail), Primedia, the media and advertising group, yesterday acquired a 30 percent stake of the lucrative station for R180 million.
Highveld Stereo is the country’s largest commercial radio station with about 1.2 million listeners. It is already the largest contributor to Primedia’s operating profit and the group bought the stake to ensure long-term growth of its earnings and cash flow.
Hosken Consolidated Investments (HCI) decided to sell its 42.5 percent indirect interest in Africa on Air – which owns Highveld Stereo – to Primedia and its shareholder Mineworkers Investment Company (MIC).
MIC, which already owns 2.2 percent of Africa on Air, was invited by Primedia to increase its stake in Africa on Air by buying a further 12 percent for R51 million.
Primedia will pay R100 million for its 30 percent stake in Africa on Air and 30 million shares will be placed with MIC.
The transaction will result in Primedia owning 85.8 percent of Highveld Stereo.
“We are increasing our stake in good radio assets,” William Kirsh, Primedia’s chief executive, said yesterday.
Primedia is jointly controlled by the MIC through controlling 41 percent of the voting rights in Primedia.
“We are increasing MIC’s investment and voting pool in Primedia,” Kirsh said. “This is an empowerment deal taking place.” The acquisition would simplify the existing complex structure. Shawn Stockigt, an analyst at Abvest Securities, believed the acquisition of Highveld Stereo would help boost the group’s full-year earnings.
Primedia is also close to concluding its R219 million acquisition of Nail’s media assets, which includes a minority stake in Kaya FM, Nail Outdoor and KFM Radio.
Kirsh said the acquisition of Nail assets would be financed through debt and he anticipated that these assets would also improve the group’s earnings and free cash flow profile.
Source: Gugulakhe Masango – Business Report