Kagiso Tiso Holdings (KTH), which owns a majority stake in Kagiso Media (KML), has offered minorities R28.50 a share to buy them out and delist the company in a proposed deal worth R1.87 billion.
The offer, announced yesterday afternoon, saw Kagiso's shares leap 17.13%, to gain 400c and close at R27.35.
Kagiso Media owns assets such as Jacaranda FM, East Coast Radio, Knowledge Factory, Mobil Alliance and Gloo. It previously sold its 50% stake in LexisNexis and acquired Juta and Company. It has been moving towards digitisation.
KTH was created through a merger between Kagiso Trust Investments and Tiso Group in July 2011. It has a net asset value of about R9 billion and in addition to media, also has exposure to other sectors in the economy ranging from power, insurance and financial services, to health.
CEO Vuyisa Nkonyeni says: "KML has always been a key investment and we aim to build on its success. This transaction forms part of the broader KTH investment strategy and also contributes positively to the transformation of a key sector of the economy."
KTH Media, through which the deal will be implemented, has received letters of support for the proposed deal from shareholders with a beneficial interest of 16%. KTH owns 51.1% of Kagiso's stock.
The offer presents an opportunity for KTH to consolidate its shareholding in KML and to partner with management in pursuing its growth strategy, it says in the announcement to Kagiso shareholders.
"The proposed transaction is in line with KTH's strategy to fully consolidate assets it controls and increase exposure in sectors in which it has experience. KML is a strategic asset in KTH's investment portfolio, and an unlisted KML would allow KTH to better align KML's strategic imperatives with those of KTH."
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