Independent News and Media (INM) has sold off its extensive South African newspaper business for €170m as it battles to reduce its €420m debt mountain.
However, the asset sale delivered far less than the initial sale estimates of around €240m and the disposal of Independent News and Media South Africa (INMSA) will now deliver R2bn (€169.1m) gross from the sale, which industry sources estimated to be a respectable seven times EBITDA (earnings before interest, taxes, depreciation and amortisation). Yesterday, the board of Independent News & Media confirmed it has agreed detailed heads of terms with Sekunjalo Independent Media Consortium for the sale of INM South Africa for R2bn.
“The disposal of the South African business will require both INM shareholder approval and Competition Commission approval in South Africa.
“The transaction is subject to finalisation of further approvals and final agreement being signed by both parties. Pending a further announcement, the detail of the heads of terms shall remain confidential,” INM said. The Sekunjalo Consortium is led by Sekunjalo Holdings chairman and well know philanthropist Iqbal Surve.
The consortium is understood to include two unions and a Canadian billionaire, and should be able to address regulatory concerns associated with such a large media acquisition.
A rival bidder, the Blueprint Group, led by advertising executive Groovin Nchabeleng, with the support of the investment arm of the National Education, Health and Allied Workers’ Unions, was also understood to be in the race.
INMSA is a major player in the South African media landscape and has 18 paid-for newspaper titles, including the market-defying Zulu-language Isolezwe, The Star, the Pretoria News, Cape Argus, Cape Times, Daily Voice, Daily News, The Mercury, Saturday Star and Sunday Independent.
Meanwhile Reuters reports that INM has successfully called an extraordinary general meeting of Australian media group APN in order to remove chief executive Brett Chenoweth from its board of directors.
INM, which holds a 28.95% stake in APN, said it had “lost confidence” in Chenoweth’s ability to run the company, which includes operations in Australia, New Zealand and Hong Kong, and called on him to quit.
Chenoweth has been CEO of APN News & Media since Jan 2011. The firm owns a host of radio stations and newspapers across Australia and New Zealand, including the New Zealand Herald.
The move ends a proposed A$100m (€77m) rights issue mooted by Chenoweth which would have diluted INM’s stake in APN if it proceeded, and the cash-strapped owner of the Irish Independent did not, as anticipated, participate in the rights issue.
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