September 10, 2013 / 4:06 PM / in 4 years

South Africa's Kagiso bids $187 million to take media arm private

JOHANNESBURG (Reuters) - South African black investment group Kagiso Tiso Holdings on Tuesday bid $187 million in cash to take its Kagiso Media KGMJ.J unit private, offering a hefty premium to minority shareholders.

Kagiso Tiso said in a statement it would offer 28.50 rand a share for the 48.9 percent in Kagiso Media it does not already own.

The offer is a 37 percent premium over Kagiso Media’s closing price on June 7, a day before Kagiso Media first said it had received a proposal.

It values the company, which controls several South African radio stations including Jacaranda FM, at around 3.8 billion rand, according to Reuters calculations.

Shares of Kagiso Media soared 17 percent to 27.35 rand.

Kagiso Tiso said the buyout was in line with its strategy to consolidate its assets. Taking the company private would allow Kagiso Tiso to focus on long-term objectives and expand its presence in Africa’s top economy.

Kagiso Tiso said it had irrevocable undertakings from shareholders controlling 17.8 percent of the target shares to vote in favor of the deal.

    It said it had secured a guarantee for 1.87 billion rand ($187 million) in funding for the deal from Nedbank (NEDJ.J).

    Rand Merchant Bank, a unit of FirstRand (FSRJ.J), advised Kagiso Media on the deal, while Kagiso Tiso said it was advised by Standard Chartered (STAN.L).

    ($1 = 9.9784 South African rand)

    Reporting by David Dolan

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