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TISO GROUP HOPES TO KICKSTART MEDIA CONSOLIDATION IF R1.1BN OFFER FOR NAIL SUCCEEDS

Johannesburg – Empowerment firm Tiso Group hopes to kick-start consolidation in the media sector if it succeeds with a R1.1 billion bid for New Africa Investments Limited (Nail), its chairman says.
Tiso is part of a consortium that is 50 percent black-owned and has offered to buy 100 percent of Nail’s issued shares at R9 each.
“There has been a lot of talk about media consolidation. Here’s the first step,” said executive chairman Fani Titi.
The consortium, which also includes Safika Holdings, Mineworkers Investment Company and financier Investec Bank, expected to submit a firm offer for Nail within the next two to three weeks, Titi said.
Nail said it had received several non-binding offers and Hosken Consolidated Investments, which owns free-to-air television station e.tv, had said it was interested.
There have been unconfirmed reports that media and advertising group Primedia had bid and that a group with media and entertainment firm Johnnic Communications (Johncom) was eyeing Nail. The market has been awash with speculation over Nail’s future since the Tiso consortium made the offer and put things into play.
Analysts suggested that Nail could be split up into several small units and sold off.
Besides its media interests, which include the popular Sowetan newspaper and radio interests in Jacaranda FM, Nail also has interests in financial services and a car rental.
Titi did not rule out asset stripping but preferred to talk of building up a critical mass of media assets using Nail with the aim of creating a black-controlled media group, be it in radio or print. “Our desire is to deliver absolute control of assets in black hands,” he said. “Nail as a stand-alone company does not have critical mass in any of the media assets like radio, newspapers.”
One option would be to sell for either cash or equity some of Nail’s 42.5 percent interest in Jacaranda FM into a group controlled by black shareholders.
A possible buyer could be media and advertising group Primedia, which has an interest in the Mineworkers Investment Company, which is part of Titi’s consortium bidding for Nail.
Alternatively, the consortium could sell its stake in Jacaranda FM and radio media sales agency Radmark to Kagiso Capital, in which Tiso has a 12 percent stake through its unit Tiso Capital. It could also sell print assets to media and entertainment group Johncom, publisher of the popular Sunday Times.
Johncom is 62.5 percent owned by investment holding firm Johnnic.
Titi, a mathematics lecturer-turned-businessman, is confident they will secure the deal, citing support in written form or options from investors holding an equivalent 50 percent of Nail shareholding.
Nail shares closed unchanged at R9.10 yesterday.

Source: Business Report – Reuters