Gupta-owned Oakbay Investments recently stated it had sold The New Age and ANN7 to Mzwanele Manyi’s Lodidox.
Manyi bought the units for R450 million in total – ANN7 (Infinity Media) for R300 million and The New Age (TNA Media) for R150 million.
The deal is set to be concluded over the coming weeks, subject to regulatory requirements.
A report by BusinessDay has stated that the amount paid “appears to be far too much”, however.
The statement was made based on a valuation of Infinity Media Networks undertaken by accounting firm Cajee Razak & Associates in October 2015.
The report stated that:
- “This valued the company on the basis of the present value of future earnings at R52 million.”
- “And R41 million for 100% equity value.”
The assets were valued on a fair market value basis, stated BusinessDay.
“Even though the business model of the firm might have changed in two years, it is difficult to imagine that its value could have soared about 10-times,” stated BusinessDay.
Manyi said the valuation did not take into account the “excellent prospects of the businesses”, stated the report, and “he was not unhappy with the price paid”.
The report added that Manyi is a “strong supporter of President Jacob Zuma”, with The New Age accused of benefiting unfairly from government advertising spend.