KAGISO MEDIA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1957/000036/06)
("Kagiso Media" or "the Company")
Share Code : KGM
ISIN Numbers : ZAE 000014007
KAGISO MEDIA NOT TO PROCEED WITH SALE OF ASSETS TO NAIL
Kagiso Media has decided against pursuing the proposed sale of its assets
to New Africa Investments Limited (NAIL).
The Chief Executive of Kagiso Media, Roger Jardine, today announced that
the company would not be considering a revision of the terms of the
initial transaction with NAIL.
Jardine said that, after studying ICASA's comprehensive reasons for
refusing permission for the proposed transaction with NAIL, Kagiso Media
was convinced that it could continue to make a positive contribution to
the media industry in South Africa and that the company had, therefore,
taken a decision not to enter into any further discussion with NAIL.
Turning to the future of Kagiso Media, Jardine said that the company's
strategy going forward would be to focus on operating performance and
growth: " Kagiso Media is a market leader in radio broadcasting,
specialised publishing and exhibitions. While the company will continue
to address issues arising from its small-cap status and illiquid share,
Kagiso Media is positioned to deliver sustainable dividends to
shareholders in the short term, while it remains attractive as an
investment to longer term value seekers."
"Kagiso Media is highly cash-generative and debt-free, placing us in a
good position to acquire quality media assets in future, should the right
opportunity arise," Jardine added.
Regarding the implications of ICASA's decision, Jardine said that,
although the regulator had blocked the merger of assets, he looked forward
to a continued constructive relationship with NAIL. Kagiso Media and NAIL
are co-investors in RadMark, the radio advertising sales house, and in
Jacaranda FM.
Jardine said that ICASA's decision had been unexpected: "We were deeply
disappointed by the decision, but are committed to working with the
regulator to change the media landscape. Everyone recognises the need to
review existing legislation and we look forward to sharing our
perspectives during the review process."
Jardine remains convinced that ICASA's approval of the Kagiso Media-NAIL
deal would have heralded a fundamental transformation of the media
industry, but said that he respected the regulator's decision: "The
transaction with NAIL was the culmination of a debate that had been taking
place in the industry for a long time. Various stakeholders are in
agreement on the need for a consolidation in this relatively small market.
Kagiso Media has long been in favour of consolidation in the media
industry and will continue to support it actively in future."
Jardine mentioned that he had met with ICASA to inform them of Kagiso's
response to their decision and to convey his company's continued
commitment to working with the regulator in finding solutions to the
various challenges confronting broadcasting in South Africa: "I expressed
my concern regarding the current regulatory process which does not allow
for an interactive process with transacting parties. Negotiating a
transaction such as the one with NAIL is a very costly exercise. It
cannot be good practice for the regulator to make an absolute decision
before sharing its concerns with the transacting parties."
"The process must be structured to give these parties an opportunity to
address regulatory concerns before a deal fails. This issue has to be
addressed in the course of any review," he concluded.
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