New Africa Investments Limited’s (Nail) reported plan to buy 24% of Gauteng youth radio station Yfm could force it to jump through a few hoops — and still not get what it wants.
Union Alliance Media (UAM), which has gone into liquidation, previously held between 25% and 26% of the station.
Dirk Hartford, CEO of Yired, owners of Yfm, says the liquidators have informally indicated Nail’s intention to acquire a stake.
Yfm is currently controlled by the Union Housing Trust, which holds 53%. In addition to the UAM holding, the Youth Development Trust holds about 11%, Hartford and two other individuals just more than 8%, and about 1% is in the hands of the Youth Investment Network.
Hartford said the shareholders would first have to exercise their pre-emptive rights to allow Nail on board.
But regulatory requirements could prove a bigger obstacle. Broadcasting regulations enforced by the Independent Communications Authority of South Africa stipulate that a 25% holding in a radio station is a controlling stake. Nail holds, through New Africa Broadcasting, 42,5% of Jacaranda 94.2FM, a dual-medium adult contemporary station in Gauteng. It also holds 24,9% of Kaya FM, also in Gauteng, and 66,5 % of KFM in Cape Town.
More importantly, broadcasting regulations prohibit media owners from holding controlling interests in more than one radio station in the same region. This may be why Nail has limited its targeted stake in Yfm to 24%.
But the strategy might not satisfy Icasa, which might still deem Nail’s stakes in Jacaranda 94.2FM and Kaya FM too influential.
The authority is becoming a thorn in Nail’s side. Last year it prevented the group from buying Kagiso Media in a R380-million deal.