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REMBRANDT SNAPS UP 26% OF MIDI

Cape Town – Rembrandt Group (Remgro), the diversified industrial group, has reentered the media sector with its acquisition of a 26 percent shareholding of the holding company of independent TV operator e.tv, for R280 million. Remgro ended longheld market speculation on Friday when it said the deal had brought to an end months of negotiations between Rembrandt and e.tv`s main shareholder, Hosken Consolidated Investments (HCI). In terms of the deal Remgro will buy an indirect stake in Midi TV by making a R280 million loan to Sabido Investments, which has an 80 percent stake in Midi. HCI owns about 70 percent of Sabido Investments. South African broadcasting authorities will be asked to allow the loan to be converted into equity in Sabido. Previously Rembrandt also helped HCI acquire a 5 percent stake in Vodacom, the cellular communication group. Rembrandt has a 13,5 percent stake in Vodacom and there is market speculation Rembrandt might be keen to acquire HCI`s stake in the cellular phone operators. JSE analysts have also questioned Rembrandt`s plans to invest in e.tv, considering Rembrandt sold most of its shareholding in Nasionale Pers and in payTV channel Canal Plus, the largest of its type in Europe, which was held through its sister company Richemont and which is still making losses. At the time analysts viewed these deals as an indication of Rembrandt wishing to move out of the media sector in an effort to become more focused in its investments. Johan Rupert, the chairman of Remgro, however, said the deal with e.tv represented an example of the industrial company`s deeper strides into black empowerment. e.tv, South Africa`s only freetoair national broadcaster, has been dogged by negative publicity in recent months, including a court attempt to liquidate its owners by a production film company claiming it was owned money. Much of the financial crisis was caused when 11 minority shareholders could not come up with their share of the funding, leaving HCI and Time Warner, a 20 percent shareholder, to fund the television operation. Rembrandt shares fell 200c to R55 on Friday ahead of the announcement.

Source: Business Report – Edward West