EMedia Holdings has moved to take full control of the entity that holds its stake in e.tv, announcing it has struck a deal with Remgro’s technology investment unit to do so.
On Friday, eMedia Holdings (EMH) said it has entered into a subscription and share exchange agreement with eMedia Investments (EMI), Venfin and Remgro. Under the deal, Venfin will sell its one-third stake in EMI to EMH in exchange for newly issued EMH shares.
Through EMI, the group controls television and radio broadcasting businesses that include e.tv, eNCA, OpenView and Yfm, together with production studios.
EMH holds about 67.69% of EMI, while Venfin holds the balance.
“The proposed transaction will materially enhance EMH’s scale by consolidating 100% ownership of EMI under the listed entity, and ensure that EMH has independent and full control over EMI’s long-term strategic direction,” said eMedia.
Venfin Interco is an investment holding company that focuses on technology-orientated interests, formed in 2000 as part of a restructuring of the Rembrandt Group, in terms of which the group’s technology investments were held by Venfin Interco while traditional investments remained with Remgro.
In November 2009, Remgro and Venfin merged again, adding media and technology interests to the group’s investments.
The first part of the transaction will see Venfin subscribe for about 18.3-million EMH N shares at a subscription price of R3.25 per share, amounting to a total R59m. The subscription price represents a premium of 20.1% to the 30-day volume weighted average price of EMH N shares to June 25.
In the second phase, Venfin will dispose of about 17.7-million ordinary shares it owns in EMI, post the subscription, to EMH. This will be in exchange for about 220-million EMH N shares. The value ascribed to the shares for purposes of the exchange is about R715m.
The group is looking to increase the number of its own shares available for public trade. Through the unbundling transaction, the newly issued EMH shares will be distributed to Remgro shareholders, thereby increasing the float.
“For an extended period of time, there has been limited liquidity in the listed EMH N shares. The proposed transaction, followed by the Venfin unbundling, will create a significantly larger percentage of the EMH N shares held by public shareholders, creating additional free float and liquidity in the EMH N shares,” said eMedia.
The share subscription will be for cash without any other effect on the financial statements, said the group, with proceeds intended to be used “for working capital purposes in the ordinary course of business”.
Unlike its rivals, eMedia is heavily dependent on advertising. In addition to advertising, DStv operator MultiChoice makes the bulk of its revenue from subscriptions, while national broadcaster SABC also takes in funds from TV licences and the government as a state-owned enterprise.
In May, the group reported total revenue for the year to March 2025 rose to R3.15bn, from R3.06bn previously. Profit for the period from continuing operations fell 9.2% to R303m.
Earnings before interest, tax, depreciation and amortisation (ebitda) was 17% lower at R548.6m. Headline earnings per share, which strip out the effects of one-off financial events, fell 10% to 45.63c.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.