Tiso group sells its Kagiso stake
MEDIA conglomerate Tiso Blackstar Group will be on the lookout for a sizeable acquisition after banking the R1.5-billion proceeds from the sale of its 22.9% stake in empowerment investment company Kagiso Tiso Holdings.
The Kagiso Tiso transaction is expected to be finalised at the end of May and Tiso Blackstar has already committed to paying a special dividend of R40million.
At an investor presentation on Wednesday, chief executive Andrew Bonamour said the company’s substantial cash pile after the sale of the stake (and subsequent reduction of debt) would be mobilised for acquisitions.
In recent years, Tiso Blackstar has diversified from its core holdings in Times Media Group (TMG) – whose publications include the Daily Dispatch, Sunday Times and BusinessLIVE – and retail solutions specialist Hirt & Carter to incorporate fastgrowing broadcast and TV operations in Africa.
Bonamour stressed that Tiso Blackstar was driven by returns on investment and any acquisition would need to be earnings enhancing. Responding to a question from Investec analyst Barry Shamley about whether Tiso Blackstar would make several small acquisitions or pursue one large deal, Bonamour indicated they would prefer a “chunky” deal.
But, he said, Tiso Blackstar would shy away from sectors that were heavily regulated in SA.
The bulk of the Kagiso Tiso proceeds will be used to repay debt and reduce interest cost. Interest-bearing debt sat at R981-million at the end of December.
The investor presentation also prompted queries about whether there was a timeline for the disposal of the company’s noncore assets, which comprise a 51% stake in steel tube and pipe manufacturing specialist Robor and 100% in steel roofing and cladding specialist Consolidated Steel Industries.
Bonamour said Tiso Blackstar had been approached by potential buyers, but he intimated that the company would not be rushed into a deal.
He said Robor’s value of tenders and request for quotations topped R1.7-billion – the highest level in seven years.
Robor’s order book was R730-million, with another R740-million still in negotiation. — TMG