The R16-billion that will flow into Venfin after it sells its stake in Vodacom to UK-based Vodafone has raised speculation about what will become of its media asset, e.tv.
If Venfin shareholders accept the offer, its assets, which include 33 percent of e.tv, a seven percent stake in Dimension Data and a 25 percent share in Alexander Forbes, will be sold into a new unlisted company, Newco.
One suggestion has been that Venfin, which is controlled by the Rupert family, will use part of the money to turn Newco into a media and information technology powerhouse.
Another Rupert family company, Remgro, recently bought a 37 percent stake in Kagiso Trust Investments (KTI), which owns a 44 percent chunk of Kagiso Media.
Kagiso Media’s assets include the radio stations Jacaranda and East Coast Radio. Venfin also has a close business relationship with Hosken Consolidated Investments (HCI), which owns 66 percent of e.tv.
e.TV is planning to expand into East Africa, so it might be the right time for a large media and telecommunications launch into the continent. A member of management at e.tv confirmed that negotiations around the expansion into Africa ‘are happening as we speak.”
Gryphon Asset Management portfolio manager Abri du Plessis believes that e.tv fits perfectly into Venfin’s media and telecommunications portfolio. He says there is a big possibility that e.tv will see some of the R16-billion from the Vodacom sale.
There has also been talk that Venfin will sell off its stake in e.tv. But du Plessis said this was unlikely with the station reporting a profit after a relatively sustained period of losses. e.TV was launched in 1998 and started showing a profit last year when it reported headline earnings of R94-million for the six months to the end of December.
Venfin and HCI have invested millions in getting e.tv to this point. ”Venfin have supported e.tv through a difficult patch. If you look at the way that they have handled e.tv in the past, then it seems that they will remain committed to the station,” du Plessis said.
‘And Venfin seem to be putting focus on media and information technology. e.TV fits into that portfolio perfectly.”
A merger with Kagiso was a strong possibility, he said. ‘You could see some asset swapping. For instance Venfin could swap its share in Alexander Forbes with KTI for a stake in Kagiso Media. There are a lot of possibilities.”
Du Plessis said the fact that Newco was still an unlisted company told him that there were further steps to come. ‘Venfin are not the types to keep a company unlisted,” he said.
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