South African media and entertainment group Naspers has introduced a black economic empowerment (BEE) shareholder in relation to MultiChoice Africa (MCSA).
The deal will result in the acquisition by qualifying black shareholders of shares in the issued share capital of Phuthuma Nathi Investments, which will hold ordinary shares in MultiChoice South Africa Holdings (MCSA Holdings) — the holding company of MCSA, the group said on Tuesday.
MCSA Holdings — a Naspers indirect wholly owned subsidiary — has, as its only asset, 100% of the issued share capital of MCSA.
A key element of the MCSA empowerment transaction is the funding of the purchase by Phuthuma Nathi of up to 45-million shares in MCSA Holdings — with the total number of MCSA Holdings shares in issue being 300-million — for R2,25-billion, based on an equity value of R15-billion and enterprise value of R17,43-billion, Naspers said on Tuesday.
The funding for the transaction will be raised by the issue of up to 45-million Phuthuma Nathi shares at a price of R10 a share in terms of a public offer to the General Black Public, and the issue of up to 180-million Phuthuma Nathi preference shares at a price of R10 a share to MIH Holdings — a wholly owned subsidiary of Naspers.
Phuthuma was formed in 1995 when about 8Â 000 disadvantaged South Africans acquired shares in M-Net, while Phuthuma Nathi was implemented in 1998, making a further 10% of M-Net/SuperSport International Holdings linked shares available for BEE.
In terms of the MCSA empowerment transaction, for each Phuthuma Nathi ordinary share with a subscription price of R10 subscribed for in terms of the public offer, MIH Holdings will sell to Phuthuma Nathi one MCSA Holdings ordinary share at a price of R50. The price is based on the underlying value of MCSA.
MIH Holdings will sell up to 45-million MCSA Holdings ordinary shares to Phuthuma Nathi, which will finance each MCSA Holdings ordinary share purchased at R50d per share by the issue to Black Participants of one Phuthuma Nathi ordinary share at an issue price of R10 — 20% of the price payable for one MCSA Holdings ordinary share — and the issue to MIH Holdings of four Phuthuma Nathi preference shares at an issue price of R10 per share — or 80% of the price payable for one MCSA Holdings ordinary share.
The Phuthuma Nathi preference shares are redeemable over 10 years or such extended period as MIH Holdings may allow.
MCSA is South Africa’s premium pay-television and internet business and it also has a 29,98% interest in M-Net/SuperSport and 100% in MWeb Holdings.
MCSA provides premium television entertainment through its DStv bouquets to more than a million subscribers in South Africa.
The book profit arising in respect of the MCSA empowerment transaction to Naspers, shareholders amounts to approximately R2,25-billion, it said.
The deal is subject to Phuthuma Nathi undertaking the public offer to the General Black Public. The number of MCSA Holdings ordinary shares to be acquired by Phuthuma Nathi will depend on the amount raised by Phuthuma Nathi in terms of the public offer.
The board of Naspers said it has considered the terms and conditions of the proposed transaction and is of the opinion that it is in the best interests of Naspers’ stakeholders.
A further announcement will be made once the public offer has been completed, it said. — I-Net Bridge