Primedia gets stake in Kaya FM
Mon, 12 May 2008
It was not anticompetitive for Primedia to have a stake in radio station Kaya FM, the Competition Tribunal said on Friday.
The tribunal said it "unconditionally" approved the merger between Primedia, Capricorn Capital Partners, a financial services firm, and NAIL.
The transaction involved Capricorn and Primedia acquiring 100 percent of the issued ordinary shares and the entire issued "N" ordinary shares in New Africa Investments Ltd (NAIL) from the Tiso Consortium.
But the focus of concern was the fact that Nail had only one asset, a 24.9 percent stake in Kaya FM.
This was questioned as being anticompetitive and was contested by African Media Entertainment.
In terms of the arrangements between Primedia and Capricorn, it has been agreed that Primedia would manage the asset, and that this shareholding would not be split 50-50 but 73-27 in favour of Primedia.
In its decision the Tribunal concluded that the 18.1 percent stake being acquired by Primedia indirectly, as a result of the Nail transaction, did not amount to it being able to control Kaya FM either solely or jointly.
The tribunal found that the merger was not anticompetitive because Primedia would not be able to control pricing decisions as it had a passive financial interest.
It also found that Primedia's acquisition of a passive investment in Kaya FM would not lead to a substantial prevention or lessening of competition in the market for radio advertising in the Gauteng region.
The tribunal said Primedia would have to take care in its governance of the investment in Kaya FM and should it becoming a controlling stakeholder, it would have to notify the transaction to the commission.
Sapa
