April 16, 2003
By Gugulakhe Masango
Johannesburg - Johnnic Communications (Johncom), the media, telecommunications and entertainment group, would consider bidding for the media assets of New Africa Investments Limited (Nail) if they were available, Connie Molusi, the chief executive of Johncom, said yesterday.
However, Molusi declined to comment on market talk that Johncom was eyeing Nail assets. "I will not comment on that issue, it's just speculation."
David Barritt, the spokesperson of Nail, said: "I don't think the speculation about Johncom being interested in Nail assets is true. But even if the news were true, we will not comment as Nail."
He said a number of asset options was being considered by the Nail board.
Last week Nail cancelled a media briefing where it had intended to announce a new strategy for its media assets. Saki Macozoma, the chief executive of Nail, said the board was considering options that might require further consultation and consideration of regulatory issues.
Three weeks ago Macozoma announced that the board might sell Nail's print media assets
.
Harold Bopalamo, a media analyst at Barnard Jacobs Mellet Securities, said the rules on cross-media ownership would be a stumbling block for Johncom if it was interested in Nail assets.
"The acquisition could be prevented by their 26.1 percent stake in M-Net/ Supersport, which would result in the telecommunications regulator refusing to authorise the transaction," Bopalamo said.
He said Johncom shareholders would be concerned about Johncom's low cash position rather than its acquisition strategy.
Market talk had suggested that Safika Holdings was understood to be in talks to acquire the print media assets of Nail if the board of Nail decided to sell them.
In an interview with Business Report, Molusi said Johncom would certainly grow by acquisition: "I think part of the consolidation of the entire media industry would entail some acquisitions at an appropriate time."
Nail and Johncom closed unchanged yesterday at R5.70 and R14 respectively.
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