Moneyweb CEO and founder Alec Hogg said, “We have had many invitations over the years, but approached the idea of introducing an empowerment partner with considerable caution. Our patience has helped us avoid mistakes made by some BEE pioneers.
“This transaction, we believe, is simply perfect – a broad-based consortium backed by a black group which has given notice it is serious about media; plus a cash injection through the issue of new shares priced at a price where existing shareholders are not prejudiced.
The transaction is being financed by black-owned group Mvelaphanda Holdings. Isingqi, which last month acquired 5% of Moneyweb's equity through the open market, will acquire the bulk of its stake through the issue of 11.8 million new shares by Moneyweb at a price of 70c.
The new shares are equivalent to 15% of the equity, the maximum which the company's directors are allowed to issue in terms of the authority voted by shareholders.
The final 3.8 million Moneyweb shares needed to take Isingqi to the required 25.1% level will be sold, in equal portions, by the company's controlling shareholders Alec and Louise Hogg, also at 70c a share.
After the transaction, Moneyweb will have 78 million shares in issue, with the new shares injecting R8.26 million into the company's cash resources.
Said Hogg, “After agreeing to top up the Isingqi holding by selling 1.9m shares each, Louise and I will still hold 49.5% of the equity of the company. Many believe having a strong controlling shareholder is a major advantage in the media industry where disproportionate benefit often accrues from decisions made with the long term impact in mind.
“As important for the company's ethos, Isingqi and its funder Mvela appreciate that although valuable financial partners, they will have no involvement in editorial policy. Indeed, they believe Moneyweb's greatest strength is its independent content. The consortium has also contractually agreed to retain its shares for a minimum of three years.”
Hogg said debt-free Moneyweb will now have over R10 million in unencumbered cash – and access to considerably more if required: “We already have big plans. Now as an empowered company, a new window of opportunity opens to us. For the first time we can seriously consider applying for broadcasting or online betting licences.”
Mvela Holdings chief executive Mark Willcox said that Mvela is looking for further acquisitions in the media sector. It expects to make further announcements in this regard in the near future.
Moneyweb was founded in 1998 and owns online business and investment news website www.moneyweb.co.za; the London-based global resources news leader www.mineweb.com and a number of smaller websites run as joint venture partnerships. The company, during prime time on weeknights, produces the nationally broadcast Moneyweb Power Hour (Radio 2000) and Geldsake met Moneyweb (RSG) in partnership with the SABC. Moneyweb also has partnerships in television with CNBC Africa (Power Lunch with Moneyweb); and in print with Caxton and Naspers by providing the content for the business sections of The Citizen and Weekend Witness newspapers.
