Johannesburg - The takeover of Kagiso Media, the black-owned media group, by premier empowerment company New Africa Investments Limited (Nail) came one step closer yesterday with the announcement that the due diligence of the company had been completed to Nail's satisfaction.
Kagiso said a formal sale agreement was being finalised and should be concluded within the next two weeks.
At the end of May Nail's shares fell more than 6 percent on the news that it intended to move on Kagiso.
The tie-up between Kagiso and Nail follows the breakdown of talks in March between Kagiso and Primedia, the radio and media firm .
At the time a media analyst said the deal would be good for Kagiso and Nail. He could see no reason why Nail's share price had fallen, apart from it being an illiquid stock that could fall or rise abruptly in thin trade.
"I think it is a good deal and it does not seem like Nail is overpaying for assets that seem to be performing very well," the analyst said.
In terms of the deal, Nail will acquire all the business operations and assets in Kagiso, without taking on any of the firm's head office management or liabilities.
Kagiso operates regional radio stations, including Jacaranda 94.2, East Coast Radio and OFM (Radio Oranje); a national radio advertising sales house; a specialist academic and professional publishing service; specialist magazines; an Internet job website; and an exhibition arm.
Nail has interests in financial services through its 51 percent stake in listed financial services company Metropolitan Life, and media through a portfolio of investments in radio broadcasting, advertising sales, television and film production and publishing.
Nail gained 3c to R1,60 and Kagiso rose 4c to R2,90 yesterday.