#PICInquiry: How Independent Media was acquired
PRETORIA – The purchase consideration of Independent News & Media South Africa (INMSA) was funded by a Chinese investor, investing R1 billion, the Public Investment Corporation (PIC) investing R850m and, Sekunjalo Consortium investing R150m.
This was said by INMSA chairperson Dr Iqbal Survé when testifying before the PIC Commission of Inquiry on Tuesday. He said the transaction included equity investment for all the investors.
Survé told the commission that five bidders were shortlisted by the advisors, Investec. But Sekunjalo Consortium was, however, the ultimate successful entity in 2013. “Its mission was to become Africa’s premium provider of quality content across all media platforms. Sekunjalo had retained Citi Bank to advise on the acquisition.”
He said after several months of negotiations as the successful bidder and due to the pressing financial predicament of the Irish, Sekunjalo was able to reduce the price paid to R2bn, thereby reducing the exposure of the PIC and other investors.
Survé informed the commission how he travelled to Ireland in an endeavour to persuade the Irish Independent Group to dispose of its Independent News & Media interest in South Africa to a South African based company. “At that stage, there was resistance from the Irish.
“About a year later, things changed dramatically. The Irish company was experiencing financial problems in Europe, and it appeared that it was necessary to dispose of its South African interest, which was then a financially viable business.
“It demanded about R4.48 billion (in today’s Rand terms) for its South African business, namely the Argus Group, which was renamed Independent News & Media South Africa (INMSA).”
Survé then explained payments made to transaction advisers as follows:
- An approximate amount of R10 million to Webber Wentzel Attorneys; and
- An amount of approximately R24 million to Citi Bank.
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