Competition Commission approves sale of Business Day, Sunday Times owner

A proposed just over R1bn transaction whereby the Lebashe Investment Group would acquire Tiso Blackstar Group (TBG SA) and Target Group should be approved without conditions.

This was the recommendation made by the Competition Commission to the Competition Tribunal on Monday.

In June this year, TBG announced that it signed an agreement to sell its South African media, broadcasting and content businesses to Lebashe for R800m subject to certain adjustments. The sale would exclude Gallo and its South African radio assets. At the time, TBG also said it had reached an agreement on the terms upon which it will sell its media, broadcasting and content businesses in Ghana, Nigeria and Kenya, plus its South African radio assets to Lebashe, for an additional R250m.

Lebashe is a 100% black-owned investment holding company. The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets. The Commission further found that the proposed transaction does not raise any public interest concerns.

TBG owns, among others, Sunday Times and Business Day. The Target Group operates in the printing and digital media services as well as the broadcasting and content services sectors – through Business Day TV, the Home Channel and film and production. The Target Group also operates radio business Rise FM and Vuma 103 FM.

When announcing the deal in June this year, TBG said its board of directors believes “the sale will unlock significant value for its shareholders while also ensuring that the media business has a strong and committed shareholder in Lebashe to take it forward”.

Lebashe said it would ensure continuity of the business with the retention of key management and believes there will be further opportunities to grow the assets through both acquisition and by growing market share.

Fin24 reported in June this year that Lebashe owns 7.2% shareholding in Capitec, 26.3% in EOH, 100% in Lebashe Capital, 16.94% in 4AfricaExchange and 74.92% in Rainfin.

Its investment in Capitec made headlines during the commission of inquiry into the affairs of the Public Investment Corporation (PIC). The shares, controversially, were acquired from the state-owned asset manager, using a R2.25bn loan from the Government Employees Pension Fund (GEPF), whose assets are managed by the PIC.

Tshepo Mahloele, Lebashe’s chair is also the CEO of Harith General Partners and previously headed the Corporate Finance and Isibaya Fund divisions of the PIC.

Testifying before the PIC inquiry, UDM leader Bantu Holomisa called for the inquiry to scrutinise the state-owned asset manager’s unlisted portfolio more closely, as well as its links to former directors, in case of a conflict of interest. Three companies fingered by Holomisa were Lebashe, Harith General Partners, and Harith Fund Managers.

In July 2018, the High Court in Pretoria issued an order against Holomisa to stop making or repeating corruption allegations against Lebashe or its directors, following an application by the entities.

In April, Mahloele was asked by assistant commissioner Emmanuel Lediga about the relationship between Harith and Lebashe, and if any fees Harith earned from its investments were used to fund Lebashe. He denied it.

In 2017, News24 reported that Mahloele sold a Pretoria mansion to ex Eskom CEO Brian Molefe at a substantial discount. Mahloele said the sale was above board.

He was also linked to a controversial plan by state-owned company PetroSA to buy petrol stations across the country.

Jabu Moloketi is a non-executive director of Lebashe. He served as PIC chairperson while he was deputy finance minister under former President Thabo Mbeki between 2004 and 2008.

He has dismissed Holomisa’s claims of a cartel of PIC-backed BEE beneficiaries as “hurtful and damaging”.

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