South Africa: Primedia Private Equity Bid 'Progressing'

Investment

Media company Primedia said last week the market could expect an announcement regarding a proposed R6bn private equity offer within the following two to three weeks. According to CEO William Kirsh, who together with the Mineworkers Investment Company (MIC) is leading the consortium, "things are progressing well and at this stage all we can really say is that further announcements are imminent".

Kirsh said that the financiers had completed a due diligence process to enable the consortium to confirm funding for the deal. The next stage would be to make a final offer for the board's consideration, before shareholders have their final say.

"An independent body has been set up within the board to evaluate the deal," said Kirsh. This is because the potential buyers, namely the Kirsh family and MIC, held current positions on the board.

Kirsh said that, if all went well, the deal should be completed by July this year.. He said there was no threat of a competing offer at this point. The price per share was pegged, in the initial proposed offer, at R25,50 for the ordinary shares, which hold higher voting power than the N-shares, which were offered at R24,50.

The price was well received by the market, according to analysts, most notably Coronation, which owns about 20% of the company, in N-shares. Rajay Ambekar, portfolio manager at Cadiz African Harvest said, while the price offer at the time had been valued near a 20% premium to the market, due to the strong trading on the JSE it now only traded at an 8% premium.

Business Day (Johannesburg), 23 May 2007