Possible buyout of Primedia


Media group Primedia told Business Day on Wednesday 10 January that it had been approached by a consortium of investors wanting to buy it out. Based on a possible buyout, Primedia shares surged 15% higher at R23 on the JSE after the announcement. Its “N’ shares were 11,1% higher at R22, valuing the group at R5,4bn.

Primedia owns radio stations 94.7 Highveld Stereo, Talk Radio 702, Kfm and CapeTalk; cinema group Ster Kinekor; a stake in soccer club Kaizer Chiefs; and has advertising, marketing and publishing divisions.

If the board and shareholders give the deal their approval Primedia may delist with some of its assets restructured into a new listed company, the group said in a statement.

Business Day reported on 11 January that CEO William Kirsh said he could not comment further on what was included in the cautionary and could not confirm whether private equity groups were involved in the talks.

About 52% of Primedia’s earnings were from radio, 29% from outdoor advertising and the balance from cinema and home entertainment, according to Lerato Molefe equity analyst at RMB Asset Management.

Primedia’s largest shareholder is the Mineworkers Investment Corporation (MIC), with about 14,7%, followed by Coronation Fund Managers.

MIC is expected to be included in any deal.

Primedia reported revenue of R2,4bn last year and net profit of R207m.


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