Primedia Limited announced on Monday that it had received approval from the competition commission last Wednesday to purchase the remaining 14% of 94.7 Highveld Stereo, which it acquired from Mineworkers’ Investment Company (MIC) in November 2005.
In addition, the Independent Communications Authority of South Africa has approved the transaction, making the deal unconditional.
Primedia will pay MIC R11,5-million in cash and issue six million “N” shares. Importantly, issuing the shares to MIC will raise MIC’s economic stake in Primedia from 16,1% to 18,2%, making MIC Primedia’s largest shareholder. MIC also exercises joint voting control over Primedia.
Based on 94.7 Highveld Stereo’s continued strong performance for the year ended 30 June 2006, the annualised pro-forma impact of the transaction in the current financial year would have been 5c per share, or, added 5,3% to last year’s headline earnings per share of 95 cents. However, the transaction will only have a financial impact on Primedia’s year ended 30 June 2007.
Commenting on the transaction, Primedia CEO William Kirsch said: “We continue to add value to shareholders by achieving earnings-enhancing acquisitions. This is a major milestone for us, as we now control 100% of the cash flows of our most valuable asset.” — I-Net Bridge