While uncertainty reigns over whether or not Johnnic Communications (Johncom or JCM) will dispose of any of its assets in the near future, it appears there would be no shortage of takers if it did decide to sell.
New Africa Investments Limited (Nail) has already indicated it would bid for some of the assets and Sandile Zungu, chairman of defence group Denel, is also reportedly interested in parts of the technology, media and entertainment group.
Other potential buyers whose names have been bandied about include media groups Naspers (NPN) and Caxton (CXT). There has also been speculation of a possible management buyout.
None, it would appear, however, is interested in the entire package. Those mentioned so far as potential buyers appear to only be interested in selective parts of the company.
Zungu, for instance, was quoted in Business Report on Monday as saying: “I am not interested in the whole of Johncom. I am only interested in some parts of Johncom and I have had a look at those parts that I like. They are some very interesting parts.
“So far I cannot think of a single buyer who wants the whole basket of media, electronic, telecommunications and entertainment assets.”
Nail, on the other hand, is after Johncom’s rich media pickings, which include the Sunday Times and 50% of Business Day and the Financial Mail. Nail has long been trying to expand its media business. Last year the Independent Communications Authority of South Africa (Icasa) shot down a R377-million takeover attempt by the empowerment group of Kagiso Media.
Zungu, however, apparently believes it is better to sell off assets in clusters rather than wholesale, saying this is the best way to maximise shareholder value.
He seems to suggest he would only be interested if the assets are sold off piecemeal.
Johncom confirmed recently that it was not currently considering the disposal of any of its underlying business units — “media or otherwise”.
Johnnic Holdings (JNC), however, which holds a 62,5% stake in Johncom, has confirmed that it is investigating various options with regard to its assets, including the stake in Johncom, to unlock shareholder value.
It says the options include, but are not limited to the possible disposal of its stake in Johncom.
Johnnic, which is controlled by the National Empowerment Consortium (NEC), an alliance of trade union pension funds and black business consortia, is thought to be considering disposing of its media and entertainment interests and focusing on its lucrative 37% stake in cellular telephone services provider MTN Group.
The latter’s share price has spiked more than 15% since the beginning of this year and 70% from its lows in September last year after a renewed cautionary relating to its African assets and speculation about a possible investment in Tanzania.
There’s been talk that MTN, which has operations in Nigeria, has been approached to take over the licence of Tanzania’s Tritel which expired at the end of January.
The sale of Johncom would apparently be welcomed by NEC’s minority shareholders, who are under pressure to repay the funding they received when the empowerment group bought 33% of Johnnic in 1996. The deadline to repay the loans is November 2003.
Whether they would be in a position to do so, however, is a matter of debate. Johnnic’s shares are currently trading at around R50 a share, but analysts say they would need to receive more than 100 cents per share to be able to repay the debt.
At 1530 local time on Monday, Johnnic’s shares were trading at R50 per share — up 35 cents or 0,70% on Friday’s close of R49,65. – I-Net Bridge