TMG eyes Primedia
Minority investors to put up stiff resistance
TIMES Media Group (TMG) has emerged as the frontrunner to buy Primedia from its shareholders for an undisclosed amount.
Business Report has been reliably informed that the group has staved off competition from potential bidders, such as Thebe Investments and media company Caxton. But the transaction is expected to face stiff resistance from Primedia’s minority shareholders, who have accused the company of putting financial interests above media diversity.
Sources who spoke to Business Report on condition of anonymity said negotiations between TMG and Primedia were at an advanced stage. “There have been discussions behind the scenes and it is now all but a question of time before Times Media takes over,” one said.
Primedia is a media and advertising group that targets premium consumers. It is jointly owned by the Mineworkers Investment Company (MIC), Brait Entities, Old Mutual and FirstRand Group.
Besides a portfolio that includes premium regional radio stations, such as 702, Cape Talk and the Eyewitness News Service, Primedia also owns cinema chain Ster-Kinekor.
Concentrate Media Monitoring Africa director William Bird confirmed that he had heard of the pending Times Media buyout of Primedia. He said while the transaction made business sense, the lobby group was worried that it would concentrate media ownership in South Africa even further.
“Further consolidation in the media is not (what) the country needs,” Bird said. “It would kill the diversity that is so important to keep our democracy going.”
Brait and FirstRand were not immediately available for comment. But early this year, Brait said it was planning to sell stakes in Consol and Primedia over the next two years to focus on its investments in higher-growth markets.
In March, Primedia sold its 365 Digital and Dash Of Lime businesses to digital media sales company Mark1 Media for an undisclosed fee.
Another source said he was disappointed at the pending sale because Primedia had represented an independent voice in the media landscape.
“This is a sad chapter… because the sale would now mean that independent voices would not be represented,” the source said. “Even progressive organisations such as the MIC are betraying the legacy that had taken years to build.”
MIC and Old Mutual refused to comment, referring enquiries to Primedia. But the National Union of Mineworkers (NUM), which owns a 100 percent stake in MIC, blamed the union’s investment arm for putting financial interests first.
NUM general secretary David Sipunzi said the union’s opposition to the MIC plans had fallen on deaf ears.
Sipunzi said the union, through MIC, decided to venture into the media space to promote media diversity. “We were made to understand that Primedia was loss-making. We could see that the MIC had the intention to offload its interest in Primedia. We do not know… why. It may be to spite the NUM’s new leadership.
“We are not even being informed who is the bidder and so we decided to stop opposing the MIC decision because we do not want to be seen as duly interfering in the MIC. We are not businessmen, we are unionists,” he said.
In 2014 , the Financial Services Board (FSB) placed TMG under investigation for allegedly trading during a closed period when directors were not allowed to trade. The FSB said it was probing how Caxton liquidated its TMG stake by selling its remaining shares to private equity firm Blackstar during a closed period.
TMG said it would not comment on its company strategy because it was confidential.
Primedia’s chief executive Roger Jardine told Business Report that it was looking at the suitability of its capital structure, including the composition of its shareholders. He said considerations would take into account the company’s needs and interests, as well as the operating environment.
He said the company was not considering any corporate activity that could lead to a listing or a sale of the business.
“In the current environment our sole focus will be on consolidating and strengthening Primedia’s strong brands and market position.
“We have an excellent and motivated management team, including some of the best media talent in the country. We are going to focus on ensuring that the business continues to be well positioned for growth.”