Media24 rebuffs Caxton offer on dominance concerns

Media24 has rejected a counteroffer by Caxton for its media logistics business and four soon to be shut newspaper titles, saying it is concerned about the group’s possible dominance in SA’s printing and publishing landscape.

The Naspers-owned media group is selling its media logistics business, On the Dot, and its community newspaper portfolio to Novus Holdings subject to regulatory approvals. Caxton has made a competing offer for the assets.

“Selling the community newspaper portfolio to Capital Newspapers/Caxton will give them (direct and indirect) ownership of 76% of the community newspaper market in SA,” Ishmet Davidson, CEO of Media24, said.

“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.”

On Thursday, Media24 said it had received an updated offer from Caxton, which now includes “a definite and concrete offer” to purchase the four newspapers earmarked for closure.

In mid-June Media24 said it was seeking to close the print editions of five newspapers, transitioning three of them into digital-only brands, placing 400 jobs at risk. Print editions on the block are Beeld, Rapport, City Press, Daily Sun and Soccer Laduma, as well as the digital editions of Volksblad and Die Burger Oos-Kaap and digital hub SNL24.

Media24 has rejected Caxton’s advances, saying it will not renege on its agreement with Novus. 

“We have already accepted the offer from Novus Holdings to purchase On the Dot, the community newspapers and Soccer Laduma, and have no intention to renege on this transaction (subject to regulatory approval),” said Davidson.

“And as mentioned before, 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.”

The competing printing and publishing group has approached the Competition Commission to oppose the closure of the titles and the sale of the media logistics business.

In raising concerns about Caxton’s possible dominance in the local printing and publishing market, Davidson said that it would be compounded by Caxton’s then near 100% control of the media distribution industry, and could shift its role as 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,” he said. 

In 2022, Media24 sold most of its operations in KwaZulu-Natal to Capital Newspapers for an undisclosed amount. Capital Newspapers, a Pietermaritzburg-based company, is operated by Caxton. 

Still, the group is willing to entertain an offer from Caxton, or another party, only for the Beeld publication “in the interest of minimising potential job losses … and keeping Beeld alive as a brand that carries sentimental value”.

This would be on condition that the purchaser retains about 30 employees potentially affected by Beeld’s proposed closure.

“Though 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 section 189 consultation process with staff, which remains in progress.”

gavazam@businesslive.co.za