The Public Investment Corporation (PIC) has decided not to support the buyout of Avusa by the Times Media Group, it was reported on Tuesday (31 July 2012).
PIC, a 17 percent shareholder in Avusa, said as a “concerned shareholder” it was worried about Avusa’s underperformance, Business Day reported.
The company’s chief investment officer Daniel Matjila said at a meeting on July 19 the state pension fund manager’s investment committee resolved not to support the buyout.
He said if the turnaround resources were already available to Avusa, the deal was not needed, according to the newspaper.
Matjila pointed out that Times Media director Andrew Bonamour was already a member of the Avusa board and, with CEO Colin Cary, a facilitator of its turnaround plan.
“Whilst the structure, post the deal, results in a significant reduction of Mvelaphanda’s shareholding, the perceived collaboration between Blackstar, Mvelaphanda and Universal Hirt & Carter results in this block of shareholders owning more than 33 percent of the business and thereby rendering them the controlling shareholders,” Matjila was quoted as saying.
“This business underperformed with Mvelaphanda being one of the significant shareholders, and therefore their continued influence via this controlling block is of concern to the PIC.”
The new Companies Act allows shareholders with more than 15 percent of voting rights to vote against a deal, and to approach a court to set aside resolutions approving it.
Times Media Group was formerly known as Richtrau, an Mvelaphanda unit with shares in Avusa. It has already won 65 percent of shareholder backing for its R24 per share offer for Avusa stock.