Naspers has been busy lately with its empowerment deals, Phutuma Nathi for Multichoice and Welkom Yizani for Media 24.
The deal that's really making the headlines is the Multichoice deal. Multichoice have dedicated a channel on DSTV (11) to the deal and they have placed ads in the press letting potential investors know how to go about investing. A good overview of the deal was in the Business Day yesterday.
Most commentators have welcomed the deal, after all the usual suspects are not expressly included and anyone shareholder (private or institutional) is limited to a 10% stake in the vehicle. I would agree in principle but the cynic in me has to observe:
- Investors will be locked in for five years (I haven't started on the cynical tack yet), and then they may only sell to BLACK investors. Oops! This is a problem. I can see why they did this, Multichoice needs to show that it has black shareholders and they don't want black people "doing an Mzi" on them. I said this in my last post - shareholding in a company is an asset and the owner of that asset must be allowed to do with it as they please. It might be likened to an application of the old Group Areas Act, where black people may only live in one area, they can do business with each other in that area but they are limited to that market. Perhaps some innovative businessman will set up a stock trading company that matchmakes black buyers and sellers (I might do this in fact).
- The exclusion of all other race groups was tried by Nedbank with their Eyethu Share scheme. Jaco Mulder of the Freedom Front Plus attempted to apply for the shares on the scheme claiming he was African. I'm not too sure how successful the scheme has been - but the M&G report informs us that a white person was allowed to buy shares.
- Following on from this last point. What is black and how do you determine it? If a white person goes to the post office and asks for an application form and is rejected by the teller it could cause all sorts of trouble. How would the teller know that the person is not black? Could it be an application of the fabled "pencil test".
We'll wait and see how the scheme pans out. In the interim, it does appear to be a good deal and those people that are entitled to benefit from the scheme should investigate it further.
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