Mvela to acquire stake in Johncom
The stake is being acquired from client portfolios currently managed or advised by fund managers Allan Gray Limited for just over R1,4bn.
Empowerment group Mvela said agreement had been reached with Allan Gray to acquire a minimum of 25,1% and a maximum of 30% interest in Opco when it is unbundled from Johncom and independently listed on the main board of the JSE, which is expected by the end of February next year.
In April Johncom announced its intention to unbundle all of its directly-held operating media and entertainment assets to a newly formed company Opco to be listed on the JSE following the disposal of Johncom’s interests in M-Net and SuperSport, currently before the Competition Authorities.
Empowerment partners of Mvela Group will participate in the transaction, to the extent that Mvela Group’s interest in Opco will not drop below 25.1%.
The purchase consideration of R1,413bn in cash will be finalised and payable once Opco is formed and is subject to, inter alia, shareholder and regulatory approval as required and the listing of Opco by February 29 next year.
Yolanda Cuba, Mvela Group CEO, said: "Our strategy is to grow shareholder value through the combination of cash generative operations and quality investments in operating companies where Mvela Group can have strategic influence with management over the investment to grow the value of the investment for the benefit of all stakeholders.
"The Opco acquisition will give Mvela Group strategic influence with Johncom management over a unique range of leading media and entertainment assets that cannot be easily replicated.
"We have engaged with Johncom management, they welcome our investment in Opco and regard us as a strategic partner to further grow and develop Opco.
"It is important to note, we fully support Johncom’s responsibility to ensure that freedom of speech and a free and independent media remain a significant pillar in the development of our country and our continent.
While Mvela Group’s shareholding will assist Opco with respect to its empowerment ownership, this is not an empowerment transaction per se. It is expected that Opco will implement an appropriate BEE transaction once independently listed. "
"The pro-forma financial effects of the acquisition on Mvela Group will be published in a further announcement when Opco is formed.
"This is an important step forward to not only build our intrinsic net asset value but also utilise our surplus cash and improve the return we earn on our capital employed," said Cuba.
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