Media24 open to offers for Beeld, shuts door on Capital Newspapers/Caxton buying distribution operation

After confirming last month that it was closing the print editions of four of its publications, Media24 has rejected a written offer from Capital Newspapers/Caxton for the purchase of On the Dot (Media24’s media logistics operations) and its portfolio of community newspapers.

The chief executive of Media24, Ishmet Davidson, confirmed that, despite earlier claims, this week was the first time that Capital Newspapers/Caxton had put forward a written offer to purchase the four newspapers earmarked for closure.

However, Media24 is sticking to the offer it has already accepted from Novus Holdings to purchase On the Dot, the community newspapers and Soccer Laduma. It says there is no intention of reneging on this transaction (subject to regulatory approval). 

“It is unlikely that we would sell the four newspaper brands; they are fundamental to our digital news strategy of serving our readers in the format that the vast majority prefers,” said Davidson.

Media24’s proposal will see Rapport’s news offering continue under its masthead on Netwerk24 and that of City Press on News24 — together forming the anchor of the media house’s Sunday news offering. Daily Sun will be relaunched as a standalone and free e-news site.

Read more: Doors to close on Media24 print titles — 800 jobs affected 

Significant media void

Caxton Newspapers placed an ad in Beeld, Rapport and City Press last month in which Caxton chair Paul Jenkins expressed concern about the potential print closure of the four titles, warning that it would “create a significant void” in the media landscape.

However, Davidson cited competition issues.

“Selling the community newspaper portfolio to Capital Newspapers/Caxton will give them (direct and indirect) ownership of 76% of the community newspaper market in South Africa. This will have a very worrying impact on the democratic right of millions of South Africans who depend on community newspapers for information and news based on independent editorial diversity. Not to mention leading to an uncompetitive concentration of regional advertising spend in the hands of ultimately a single publisher, albeit with many and diverse subsidiaries,” he said.

According to Davidson, this would “compound” Caxton’s then near 100% control of the media distribution industry, shifting its role from a leading newspaper printer to one of dominance in the industry. “In a nutshell, they would be in absolute control across the entire newspaper industry value chain.”

Riquadeu Jacobs, the managing director of Capital Newspapers, said on Thursday the objective of the offer to buy the community newspapers was to save most of them as print titles. “Unfortunately, Media24 has rejected the offer. We will deal with the matter before the competition authorities when a merger notification is made,” he said.

Jenkins has accused Media24 of “touting the sale of On the Dot” for several months. He also alleges that at least one potential buyer was told the newspaper closures were at the direct instruction of Naspers chair Koos Bekker.

Media24 has already started a Section 189 retrenchment process and Davidson says any offers for Beeld will be considered, subject to about 30 employees being retained.

“Although we rejected the offer from Capital Newspapers/Caxton, we invited them to make an offer for Beeld. We welcome reasonable and properly considered offers from all interested parties,” Ishmet said. “Any offers received will be subject to regulatory approval, if required, and will also be included in the S189 consultation process with staff, which remains in progress.”

The 30 employees who would need to be retained fill roles across editorial production, sales, administration and other support services. It is understood that the journalists have already been integrated into Netwerk24.

The union Solidarity, which represents several Media24 employees, said it was aware of the rejected offer, but was still considering its comment due to the sensitive nature of the negotiations. DM

This story will be updated with Solidarity’s comment, which is expected on Friday, 19 July.