In a move that could see Johnnic Communications (Johncom) finally
introduce black empowerment partners, the media company announced
yesterday that it would spilt into two listed companies, writes Thom McLachlan in Business Day.
The first entity, OpCo, would control the groupÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s media and entertainment assets while the second, Johncom, would house the companyÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s 38% Caxton shareholding.
Shareholders, led by institutional investors Coronation and Allan Gray, have for the past two years been urging Johncom to sort out two issues: its black empowerment profile and the unbundling of the Caxton shares.
The decision appears to remove media company Caxton and its powerful chief, Terry Moolman, from the future course of JohncomÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s media businesses, perhaps especially the Sunday Times. Johncom CEO Prakash Desai said OpCo would control the operational media and entertainment business, including Business Day (Johncom owns half of BDFM, publishers of Business Day), the Sunday Times, Nu Metro, Gallo and Exclusive Books, while Johncom would retain the 38% of Caxton.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œOpCoÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s creation will also facilitate a BEE deal,ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â Desai said. ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œWe have finality on the trade and industry departmentÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s BEE codes and the transaction will be guided by these. We will look into all options with all interested partners with regard to the stake itself,ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â he said.
It has been speculated that the benefits of the relationship between Caxton and Johncom have up to now been in MoolmanÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s favour and that there has been bad blood between the two companies since the days of axed Johncom CEO Connie MolusiÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s reign.
The complex structure of the Caxton shareholding has made it difficult to sell the Johncom shares as a single unit as there is both direct and indirect ownership, which involves minority shareholding in unlisted entities owned indirectly by Caxton.
Click here to read the full report, posted on Business Day's website.