EMILIA SITHOLE, Johannesburg | Friday 2.20pm
NEW Africa Investments Ltd on Thursday allowed an option to take a major stake in publishers CTP and Caxton to lapse, but received a handsome consolation prize of almost R1-billion in cash.
Shares in South Africa’s foremost black-owned firm shrugged off the news it had received R994-million from Johnnies Industrial Corp Ltd for 7% of M-Cell, one of the owners of cellular phone operator MTN.
But analysts said it was a blessing in disguise and will aid Nail — trying to restructure to erase the deep discount to net asset value that dogs its shares — to grow in the future.
”They get cash, which means Nail is less likely to raise finance via more share issues, removing the dilution threat from the stock and helping them pay for acquisitions in the future,” said one analyst who declined to be identified.
The counter was up five cents or 1,33% at 380 cents — its level for most of the day’s session — on tiny volumes of 200 shares. Nail’s more active ‘N’ shares stood 1,47% lower at R3,35 with 4,5-million shares changing hands.
Earlier, Johnnic and its subsidiary Omni Media Corp Ltd said Omni would exercise an option, agreed back in March, to purchase 126,7-million shares of M-Cell from Nail.
But the companies said Nail had allowed its option to buy stakes in the CTP and Caxton groups from Omni — which would have given Nail 43% of CTP — to lapse.
”No waiver of pre-emptive rights has been obtained and Nail has not exercised the CTP group option. Accordingly, Omni will retain ownership of its CTP group interests.”
Nail executives were not available to comment.
Caxton, which publishes titles that include the Citizendaily newspaper and a range of titles distributed free to suburban households, owns 53% of CTP.
Senior management at Caxton hold certain pre-emptive share rights and their failure to surrender these scuppered the sale to Nail of the CTP stake. — Reuters