South Africa: Johncom Nears Sale Approval

Investment

Johnnic Communications (Johncom), SA' s second-largest media company, said yesterday the Competition Commission had unconditionally approved the sale of its stake in M-Net and SuperSport to Naspers. Last year, media giant Naspers, the country's biggest company in the sector, agreed to pay cash and shares worth R3,15bn for Johncom's 38,56% interest in the two pay- television channels. The sale would boost Naspers' holding in the channels to 98.7%. Additionally, the deal forms a crucial role in Johncom's unbundling strategy and a possible empowerment deal.

Johncom has unveiled plans to spin off and separately list its media and entertainment assets. It said that once the Naspers transaction had been completed, the remaining 38% shares in media group Caxton would be separately listed as Johncom, while the media and entertainment operations -- including Business Day, Sunday Times and Nu Metro -- would fall under a new listed company with the temporary name Opco. The company said the deal would allow it to focus on expanding its media and entertainment business and make it easier to bring black investors on board to meet affirmative action targets.

In January, about 80% of shareholders voted in favour of the deal. It is now up to the Competition Tribunal to have the final say. The company said it would now turn to gaining th is approval as well as that of the JSE, which would need to unconditionally approve the listing of the Naspers N-shares on the exchange.

(Business Day (Johannesburg), 1 June 2007)