Consortium supporting bid for Independent News & Media named
Cape Town Thursday, 20 June 2013 -Following Monday's very strong support given by the shareholders of Independent News & Media Plc at their EGM to the disposal of its South African operation, The Sekunjalo Independent Media (SIM) consortium, in line with its undertaking to do so, today (Thursday, 20 June) named the other members of the group that are acquiring the South African operation of Irish-based Independent News & Media PLC (INM).
The announcement was made in Cape Town by Sekunjalo Chairman Dr Iqbal Surve who noted that while this a private and commercial transaction where details of shareholders and funders were typically only made public once all the sale conditions had been fully met and the transaction had become unconditional, the competitor media had unfortunately set about creating a huge amount of unnecessary speculation which had offended the privacy of such arrangements. In February this year, INM signed a heads of agreement with Sekunjalo for the sale of INM South Africa (INMSA) for a consideration of R2-billion (€150.6m/$227m).
The announcement by SIM follows a statement issued by the sellers, Independent News & Media in Ireland, on Monday (June 17) confirming the positive vote by over 99 per cent of INM shareholders in favour of the sale of INMSA to the Sekunjalo Group.
Dr Surve said that since SIM had been holding irrevocable undertakings from the Irish company's major shareholders for some time, he was pleased by the strong endorsement by the shareholders, which he called "a further positive endorsement of the transaction". All that remained now to close the transaction was approval from the South African Competition Commission. Since this was at an advanced stage, he was confident that ownership of the media group would soon "return to South Africa".
"These are exciting times for us and the country, and we are happy with the INM Shareholders' decision," said Dr Surve. "Our advisors from Citibank, ENS, and auditing and tax partners conducted an extensive due diligence and we looked at the business thoroughly. We know we can continue to grow and run this media group profitably."
Announcing the shareholding structure, Dr Surve said that the two main shareholders would be Sekunjalo Independent Media (Proprietary) Limited consortium with 75% and the Government Employees Pension Fund acting through its authorised representative the Public Investment Corporation SOC Limited (PIC), with 25%.
The lead shareholders and main consortium members within SIM would include Sekunjalo Investment Holdings (Proprietary) Limited; trade union investment companies, the Congress of South African Trade Unions (Cosatu) investment company Kopano Ke Matlaka represented by Mr Collins Matjila, SACTWU Investments Group (Proprietary) Limited, represented by Mr Andre Kriel, the Food & Allied Workers Union (represented by Basebenzi Investments (Proprietary) Limited and Mr Katishi Masemola) and; a special purpose vehicle which will house a 10 per cent stake reserved for employees of the company. This lead shareholder grouping will represent 63 per cent of the consortium.
The remaining 37 per cent of the shareholding in the SIM consortium will be made up of a number of broad-based value adding partners including the Black Business Chamber (Western Cape), represented by Mntuwekhaya Cishe and Sizwe Seun Ngqame various independent South African Women's business community organisations spread throughout the country, represented by Lindiwe Barbara Ngcobo, and Manemele Maria; Sekunjalo Digital Media(Proprietary) Limited ( which will assist in driving the digital and mobile growth strategy); the Mvezo Development Trust represented by Mr Mandla Mandela which will provide for the development of the communities of the Eastern Cape; the Umkhonto Wesizwe Military Association (through the Military Veterans Trust), Western Cape Development Trust that will focus on the provision of bursaries for journalists from black communities and some prominent entrepreneurs and business people such as, Mr Sandile Zungu, and media and advertising personalities Mr Tim Modise and Mr Groovin Nchabeleng from Blue Print Group.
The Sekunjalo Consortium will at all times have control of INMSA with a number of funding partners sharing in the equity of the company. Funding, said Dr Surve would firstly come from the Sekunjalo Consortium itself, from banks, including a firm commitment from an international bank, the trade union investment companies, the GEPF acting through its authorised representative the PIC and a Chinese Consortium.
To ensure that the business has sufficient capital resources to reinvest in vernacular titles, digital strategy, reinvigorating existing titles and an African growth strategy additional funding has been arranged which may see a further shareholding/ investment of 20% placed with the Chinese Consortium. The SIM will have the majority and controlling shareholding interest in Independent Newspapers, with the GEPF holding 25% and the Chinese Consortium possibly having a minority interest of 20%, ensuring that INMSA is firmly in South African hands.
Independent News & Media SA owns the Cape Times, Cape Argus, Weekend Argus, Daily Voice, The Star, Pretoria News, Saturday Star, Sunday Independent, Diamond Fields Advertiser, Weekend Pretoria News, Daily News, The Mercury, Post, Independent on Saturday, the Sunday Tribune, the daily Zulu language newspaper, Isolezwe, as well as separate Saturday and Sunday editions of Isolezwe. It also owns a number of weekly community newspapers in the Western Cape and has investments in the community newspapers markets in KwaZulu-Natal and Gauteng.
In addition to newspapers, it owns and runs a significant news and classified website IOL and publishes three leading Condé Nast international magazine brands: House & Garden, GQ and Glamour.
Dr Surve said he believed strongly in the future of print media in South Africa, especially among the growing number of community titles and as literacy rates increase. "This is the beginning of a strategy to invest in newspapers across Africa, and to focus on developing digital and other cross-media opportunities."
The Sekunjalo Group, the lead partner for the consortium is a collation of companies, investments and funds - and is a World Economic Forum company. The Group has interests in health, technology, marine, finance and telecoms. The Group focuses on three specific areas: Sekunjalo Holdings (a private holding company and the controlling shareholder of JSE-listed Sekunjalo Investments Limited); JSE-listed Sekunjalo Investments Limited, which has majority control of its major investments; and a private equity black empowerment investment fund that supports influential black individuals and black-owned businesses with significant influence in the South African economy. Sekunjalo Investments Limited is the Financial Mail/Empowerdex's Top Ranked Empowerment Company.
Dr Surve said that he hoped this announcement would lay to rest all the unnecessary speculation that had up to now surrounded the deal and urged all parties to now respect the work of the Competition Commission and to allow it to complete its mandate.
Statement issued by Sejunjalo Independent Media (Proprietary) Limited, June 20 2013
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