The transaction is subject to regulatory approval and could see Kagiso Media owning an effective 16.67% in Kaya bringing the total Kaya ownership by the consortium to 50%. Kagiso Media will own 24,9% in both P4 Cape Town and P4 Durban; and Makana 33.3% in each station, with Tiso owning the balance at 41.8%. Together the consortium will own 100% of both P4 Cape Town and P4 Durban.
"This consortium represents three parties with a powerful combination of impeccable empowerment credentials and strong radio experience," comments Roger Jardine, CEO of Kagiso Media.
Jardine said that Kagiso was delighted to partner Makana. "Makana is the founding shareholder of the P4s and they have managed the two greenfield stations to profitability under very difficult circumstances. We are looking forward to working with them."
All three stations are fast growing. Kaya, started by Thebe Investment Corporation in 1997, is the sixth largest private regional radio station in South Africa by audience size and grew revenue by 25% over the year to December 2004. P4 Cape Town operates in the desirable LSM 6-10 demographic and has grown its listenership by 52% in the past year to 531 000 weekly listeners. P4 Durban has grown its audience by 53% over the past year to a 613 000 weekly audience.
"We have grown our access to six radio stations and move into Cape Town for the first time," comments Jardine. He said that while Kagiso as a minority shareholder will not control the newly acquired P4s, he was excited that the stations would be sold by RadMark, Kagiso's radio airtime sales house. RadMark would now be able to offer advertisers a national footprint and access to 7.4 million listeners across the LSMs.
Tiso and Kagiso Media have been co-investors in Jacaranda 94.2fm since 2004. The station currently has an audience of 2.8 million listeners.
The transaction is subject to shareholder agreements and ICASA approval.
"We believe this transaction could fundamentally change the way private radio is owned and managed in South Africa. Should ICASA approve the change in ownership, as a non-controlling minority shareholder, Kagiso Media becomes well positioned to take advantage of the proposed changes in radio ownership," concludes Jardine.
