Johannesburg - Kagiso Media, the media group with broadcasting and exhibitions interests, would continue to look for a merger deal to help it grow and unlock shareholder value, Roger Jardine, the chief executive, said yesterday.
This follows the calling off of merger talks between Kagiso and Primedia, the integrated media group, on Tuesday.
"We're obviously disappointed we didn't conclude this transaction," Jardine said.
Jardine said negotiations were pointless without Primedia having disposed of its noncore assets and resolved its gearing concerns.
He said Kagiso felt stronger as a standalone company, but considered the challenge of growing to bring liquidity to its share urgent.
Primedia slumped 8,33 percent, or 50c, to R5,50 on the JSE Securities Exchange yesterday, while Kagiso lost 20c to R2,50.
William Kirsh, the chief executive of Primedia, said yesterday the company aimed to complete its disposal of noncore assets by June. It remained committed to revisiting the deal to develop a high-growth broadcasting business.
It also hoped to mitigate the effect of a poor performance from movie group Ster Kinekor, but had not yet decided on selling it.
Kirsh said he would have loved to conclude the deal, but Kagiso felt it unreasonable to negotiate while Primedia sorted out its house.
Primedia would have paid about R250 million for Kagiso, increasing its debt to R400 million. Kirsh said most shareholders were not comfortable with that level of debt.
A quick conclusion of the sale of a 50 percent interest in Ster Century, expected to realise about R300 million, still topped Primedia's immediate priorities. In the short term it would sell or merge the remaining assets in Primecom, its UK-based direct marketing subsidiary.
Meanwhile, Kagiso posted a 42 percent increase in headline earnings a share to 23,7c on turnover that rose 32 percent in the six months to December.