Media group Naspers is to acquire Johnnic Communications’ (Johncom) 38,56% stake in pay television channel M-Net/SuperSport for a combination of Naspers shares and cash, it was announced on Tuesday.
Naspers, which currently owns an effective 60,12% interest in M-Net/Supersport, will issue 20,9-million Naspers N ordinary shares and pay R250-million in cash to Johncom for the lucrative stake. The total consideration for the deal is estimated at R3,145-billion based on the closing share price of R138,60 per Naspers N share as at November 10 2006.
The Naspers N shares issued to Johncom will immediately be unbundled to Johncom shareholders. In addition, Johncom will receive its share of 38,56% of an aggregate cash dividend of not less than R200-million payable by M-Net and SuperSport by December 31 2006.
Johncom chairperson Mashudo Ramano stated: “After full consideration we as a board believe this offer provides real value to Johncom shareholders. We will continue to focus on becoming an integrated media house as we deliver value to our shareholders. The group’s media and entertainment assets provide an exciting platform for future growth.”
Steve Pacak, financial director of Naspers, said: “The pay television industry is presently undergoing significant change, with rapid technological developments. Severe competition is also coming with 18 applications having lodged to launch new pay television services in South Africa.
“This changing environment will increase costs and put pressure on cash flows. It therefore seems prudent to consolidate the interest in M-Net and SuperSport ahead of the storm. This interest will now be injected into MultiChoice South Africa [MCSA], where a strong empowerment component is now being introduced. This is also important for the future of M-Net and SuperSport.”
Naspers added that it was currently concluding an empowerment drive within its South African operations. The Johncom transaction would ensure that M-Net and SuperSport were appropriately empowered and would secure the best possible position for the new BEE shareholders of MCSA.
Both parties have been invested in M-Net and SuperSport since their inception. — I-Net Bridge