JSE-listed Johnnic Communications` announcement that it has received an offer to buy out its holding in M-Net, a joint venture between it and Naspers, has led to market speculation that Naspers is seeking to own all of M-Net.
M-Net has several convergence initiatives under way as SA builds up towards the 2010 Soccer World Cup.
While Johncom is tight-lipped - according to reports - about whom the mystery bidder is, an analyst suggests it would make sense for Naspers to buy out the shares it does not already own in M-Net and SuperSport, a view not everyone agrees with.
"I wouldn`t be surprised if they [Naspers] want the other 40%," says the analyst, who asked not to be named. He adds that Naspers must be aware of the fact that originators of content - such as M-Net - are going to be more valuable in an era of convergence.
"Strategically, it makes sense, but it always boils down to at what price [Johncom will sell]."
Analysts have valued M-Net at just over R8 billion, and place M-Net`s holding at about 40% of that, or R3.3 billion.
Naspers selling stake?
While no reference to the size of Johncom`s stake in M-Net could be determined from its latest annual report, the MultiChoice SA (MCSA) black economic empowerment deal prospectus indicates Naspers has a total direct and indirect shareholding of 60.12% before the implementation of the deal.
M-Net`s shares, it says, are "indivisible linked units with SuperSport shares". However, further down in the prospectus it states that Naspers may seek to sell its stake in M-Net.
"Naspers has agreed to sell, subject to the fulfillment of certain conditions precedent, its direct and indirect interests in M-Net/SuperSport to MCSA," a wholly-owned subsidiary. The media company would finance the sale, which would be at fair market value, through a loan, preference shares or a combination of the two.
"For this purpose, MCSA has already created the necessary preference shares and the board of directors of MCSA has been given the authority to issue these preference shares for such purposes," the prospectus states.
Johncom`s shares closed up on Friday at R70, after hitting a 12-month high of R75. On Thursday, its shares closed at R67.50. Its 12-month low is R45.25. Naspers also saw its shares move up on the news, closing at R129 on Friday, up from Thursday`s close of R128. Its 12-month high is R140 and its 12-month low is R95.79.
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