Johncom must make decision

2 November, 2006 at 12:45 pm | Posted in Companies | Leave a comment

The board of Johnnic Communications (Johncom) would have to “make a decision very soon” on the offer it has received for its 38 percent M-Net/SuperSport stake, Johncom director Tom Wixley confirmed yesterday.

Wixley added that because of the size of the asset, a decision to sell would have to be ratified by the Johncom shareholders. The offer is believed to have come from Naspers.

The decision at board level is likely to be complicated by the uncertainty of the status of two recent appointments to the board. The two new directors, Francois van der Merwe and Dods Brand, were recommended by two of Johncom’s largest shareholders, fund managers Allan Gray and Coronation, which hold more than 50 percent of Johncom.

One leading corporate governance expert said yesterday that the decision to sell the M-Net/SuperSport stake was expected to pitch the short-term interests of the shareholders against those of the company.

Shareholders of Johncom are likely to get an attractive payout in Naspers shares. But given the strategic significance of the stake to Johncom and its expected long-term appreciation in value, the sale may not be in Johncom’s best interests.

Naspers is reported to be keen to get 100 percent ownership of M-Net/SuperSport in a bid to secure the necessary approval in the new broadcast licensing dispensation.

The current structure of its holding in M-Net/SuperSport is complicated by the Johncom agreement and has meant that Naspers can only include a 30 percent stake in M-Net/SuperSport in its Phuthuma Nathi empowerment scheme.

(BusRep)

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