Times Media to Be Taken Over by Publisher Investor Blackstar

Times Media Group Ltd., the South African publisher of the country’s biggest newspaper, is to be taken over by its biggest shareholder Blackstar Group SE to raise cash for investments in other industries.

Blackstar, which has a 32.5 percent stake, will offer 22 rand a share in cash for the stock it doesn’t already own, both companies said in a joint statement today. That values the owner of the Johannesburg-based Sunday Times at about 2.8 billion rand ($244 million). The cash offer won’t exceed 500 million rand and the balance will be settled in new Blackstar shares, the companies said.

Times Media “currently has limited scope for future investment and therefore limited opportunity to optimize shareholder returns,” Blackstar said. “Future cash flows may be utilized to support” a strategy of investing in more profitable businesses.

Newspaper publishers are battling financial constraints as readers switch from print copies to online content. Times Media is cutting jobs at its flagship Sunday Times title because the paper isn’t meeting its budget projection, people familiar with the situation said last month. The company also publishes a range of local and trade titles including the Sowetan and Financial Mail.

Times Media shares were down 0.5 percent at 20.90 rand at the close in Johannesburg, after gaining 7.7 percent on Dec. 5.

In a separate deal, Blackstar said Tiso Investment Holdings and Tiso Foundation would reverse their shareholding in Kagiso Tiso Holdings into the company, which will be renamed Tiso Blackstar.

The enlarged company, which will have listings in both London and Johannesburg, will have a net asset value of more than 4.6 billion rand. It will be lead by Andrew Bonamour, who is also chief executive officer of Times Media.

(An earlier version of this story corrected description of

Tiso transaction.)

Before it's here, it's on the Bloomberg Terminal.