JSE-listed media company Caxton has quietly sold its shares in Johnnic
Communications (Johncom) on the open market and now holds a 2.4 percent
stake worth R228 million, writes Thabiso Mochiko in Business Report.

In August, Caxton owned about 4 percent in Johncom; in January, it had 3.4 percent; and between then and the end of last month, it disposed of 1 percent.

Rajay Ambekar, a portfolio manager at Cadiz African Harvest, said Caxton might have decided to sell its shares on realising that Johncom was backing down on a tie-up, which would have resulted in a possible transfer of lucrative contracts to Caxton.

Caxton, which is coy on revealing its strategic plans, might sell its entire shareholding in Johncom.

However, Khulekani Dlamini, a portfolio manager at Renaissance Asset Managers, said Caxton's shareholding in Johncom was too small to have any material impact.

Johncom announced this week that it would separate its businesses by forming two separate listed companies. OpCo will house Johncom's core operations such as media and entertainment and will be headed by Johncom's chief executive, Prakash Desai. Johncom will be left with the 37.79 percent stake in Caxton. OpCo will in turn sell shares to black partners.

Johncom's restructuring was aimed at eliminating the complex shareholding structure related to its stake in Caxton, which was said to have prevented the company from finalising an empowerment transaction. Johncom holds a 49.9 percent stake in Afmed, which holds shares in Caxton. The rest is owned by Moolman & Coburn Partnership. Johncom has a year to decide what to do with the 37.79 percent in Caxton.

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