The Public Investment Corporation (PIC) has given up a potentially messy fight to stop the takeover of media group Avusa after shareholders of the media company voted overwhelmingly in favour of the R3bn buyout.
Observers say the developments around Avusa positions the PIC in a “once were warriors” posture and added that the most powerful asset manager in the country should not have picked this fight in the first place. They say this is a further indication that the PIC lost its clout and fighting spirit after the departure of firebrand Brian Molefe. The current CEO Elias Masilela is seen to lack the political skills that go with leading an entity with assets under management of more than R1 trillion.
The PIC had expressed reservations about the R3bn takeover saying the suitors, which include Tokyo Sexwale’s BEE group Mvelaphanda, did not have the required skills to turnaround the fortunes of the company. This had placed the PIC in the same corner with groups like the South African Communist Party (SACP) which opposed the deal on political grounds. Being in the corner of President Jacob Zuma the SACP is thought to have opposed the deal on grounds that it would give Sexwale who may challenge Zuma for the presidency an unfair advantage. Avusa owns prominent print media assets including the Sunday Times, Business Day, Financial Mail, Sowetan, Sunday World and Summit TV.
The PIC went into the shareholders meeting to stop the transaction but failed with fellow Avusa shareholders voting 78.5% in favour of the takeover.
The PIC’s Maqhawe Dlamini was quoted saying “I can confirm that our vote was no, but obviously, with 79% of the shareholders having voted yes, the deal should go ahead. We are going to abide by the decision of the majority. We want to lead by example when it comes to corporate governance.”
A statement issued on the JSE said “at the general meeting of shareholders held on Thursday, 16 August 2012, an overwhelming majority of ordinary shareholders passed all the special and ordinary resolutions as set out in the notice of general meeting.
“The Scheme is still subject to the fulfillment of certain conditions precedent, including the receipt of unconditional approvals, consents or waivers from the South African, Botswana and the Namibian competition authorities”.
Mvela executive Miki Xayiya was quoted saying “We are thrilled with this vote of confidence. “This is part of Mvela’s aim to unlock shareholder value,” said Xayiya.
The deal will see Avusa delisting from the JSE and its assets put in an entity called Times Media Group, which is a subsidiary of Mvelaphanda. With Mvelaphanda unbundling its investments, its interest in Times Media Group will be distributed to shareholders including Mvelaphanda Holdings. It has been reported that this exercise will live Mvelaphanda Holdings with a negligible interest in Avusa.