Regulators hovering around Multichoice
IT WAS inevitable that MultiChoice’s monopoly of the payTV market would come under scrutiny. Sure enough, the company now faces possible probes from two regulators — the Competition Commission, which is investigating a complaint filed by struggling competitor TopTV, and the Independent Communications Authority of SA (Icasa), which is concerned about market access.
TopTV, which has struggled to compete because it lacks access to popular content such as sports that are tied up by multiyear contracts, alleges this is an abuse of dominance. Presumably the remedy is for MultiChoice to be forced to share content such as live rugby, although that would raise complex legal issues. The UK has helped some new entrants to the pay-TV market by imposing rules on incumbents, but doing so retrospectively seems unreasonable, and MultiChoice is bound to resist such a move.
MultiChoice is in the unfortunate position of having to answer to two regulators, which could get messy if Icasa and the Competition Commission fail to work together closely on this matter. The last thing the sector needs is a repeat of the Telkom debacle, where the fixed-line operator argued that the commission did not have jurisdiction and it was Icasa’s prerogative to pursue antitrust complaints.
The matter was ultimately dealt with by the commission and a fine imposed, but not before it had been drawn out for months.
WILDERNESS Holdings is a tightly held stock with only 9%, or about 20million shares, in free float.
The balance is held mainly by the Tollman family, which also owns the Travel Corporation and JSE-listed Cullinan Holdings. Even so, those few with a stake in the company might have had a jolt to see it topping the biggest losers list on the JSE last week, when the company lost nearly half its value.
The stock opened on Thursday at R2.50, but slumped to a close of R1.30. There it stayed until Tuesday this week, when Wilderness topped the winners list with a 53% gain, closing at R2. Such movements usually give a CE — and shareholders — heart palpitations. Except the volume was minuscule. The first trade was only 118 shares and the second 32 shares. A classic case of illiquid stock syndrome, where a small trade causes a large price movement.
More interesting is that the Tollman family, through Wine Investments Limited, appear to be building a stake that might lead to a mandatory buyout of minorities. It recently acquired the balance of private equity firm Brait’s 7% stake in the business, taking their shareholding to just below the key 35% level.
Are the Tollmans looking to fold Wilderness into their Cullinan business as a premium brand offering? And will they be able to convince the founders of Wilderness to go along with that plan?