WeeklySA_AdminINTEREST: The telecommunications company dumps negotiations to acquire 35 percent by former CEO Sipho Maseko and partners…
By Lehlohonolo Lehana
Telecommunications Group Telkom has rejected a proposal from a consortium that includes its former group CEO, Sipho Maseko, saying it’s “not in the best interest of shareholders”.
The consortium comprises Maseko’s Afrifund Investments, Madagascan operator Axian Telecom, the Government Employees Pension Fund, and the Public Investment Corporation — Africa’s largest asset manager. The consortium was looking to acquire a 35% stake in the company.
Telkom has now officially shot the deal down.
“The Telkom board of directors, having considered the indicative proposal, has decided not to continue discussions with the consortium, as the board is of the view that the indicative proposal is not in the best interest of shareholders and that the current Telkom strategy will yield better value,” it said in a notice on the JSE news service.
Telkom withdrew a cautionary announcement that it issued in June warning shareholders to exercise care when trading its shares.
The group’s rejection of the consortium’s proposal could pave the way for MTN Group, which had previously entertained the idea of buying its rival, to return to the talks table.
Telkom was trading down more than six percent in the afternoon session on Friday as investors digested the latest news.
The South African government owns 40.5 percent of Telkom, while another 14.8 percent is owned by the Public Investment Corporation (PIC), which is closely linked to the government, according to Broadband.
This means that government has power over the company — and is why it’s known as Telkom SA SOC (state-owned company).
Telcom was born out of the then government-owned Department of Posts and Telecommunications (DPT), which was broken into Telkom and the SA Post Office on 1 October 1991.
The government started Telkom’s privatisation journey when it allowed the fixed-line operator to join forces with mobile giant Vodafone to start Vodacom.
It went one step further when it allowed Telekom Malaysia and SBC to buy a 30% stake in Telkom in 1997 through the Thintana consortium.
On 4 March 2003, Telkom was listed on the Johannesburg stock exchange (JSE) and the New York stock exchange (JSE).
Although Telkom was delisted from the New York Stock Exchange on August 27 2009, it remains listed on the JSE.
QUEEN’S STILL SMILING ALL WAY TO THE BANK
Immortal: Queen shows no sign of fading into history as band’s earnings jump 4.3 Percent to nearly R942 million in 2022…
By Daniel Tencer
British rockers Queen saw a serious spike in their earnings in recent years, owing in no small part to the success of the Oscar-winning 2018 biopic Bohemian Rhapsody.
Nearly half a decade down the road from that movie’s release, one would think the band’s earnings would be dropping back down again. Not so.
The latest annual report from Queen Productions Ltd. – the UK-based company that collects the band’s turnover – shows that in the fiscal year ending September 30 2022, the band took more than R900 million.
That’s an increase of 4.3 percent from the year 2021, when turnover came in at just over R1 billion. The new numbers, available publicly on the UK’s Company’s House, give the band a significant financial shot in the arm as it reportedly prepares to sell its recording and publishing rights for what could be a record-breaking sum above R18 billion.
Queen Productions is owned in equal parts by the three living members of Queen – Brian May, Roger Taylor and John Deacon – as well as the estate of Freddie Mercury.
The company owns the band’s master recordings outside the US and Canada (where they are owned by Disney Music Group), and licenses them worldwide to Universal Music Group (UMG) as its distributor and record company partner.
The band’s publishing rights are owned by another entity, Queen Music Ltd., and are administered by Sony Music Publishing. Queen Music’s financial statements suggest its income is being paid through to Queen Productions.
The band’s royalties did drop a little in the latest reported fiscal year, to R870 million, from R918 million the previous fiscal year, a decline of 5.3 percent. But overall turnover was still higher in the latest fiscal year, thanks to “the success of the We Will Rock You theatre production UK tour as well as an increase in license fees on live music touring,” the company’s report stated.
The company’s profit before tax came in at R535 million, up 31.6 percent year-on-year from R410 in the year 2021. The numbers indicate that the boost in Queen’s popularity from Bohemian Rhapsody seems to be having a very long tail indeed.
The company’s turnover in the year 2022 was more than triple the number in the year 2016, before buzz began around the Bohemian Rhapsody movie. That year, the company’s turnover came in at R290 million.
The numbers are so strong that Queen Productions’ directors – the three surviving members of the band – seem to have changed their tune on the company’s outlook.
In the report for the year 2021, they predicted that, with the Bohemian Rhapsody biopic fading into history, income is “expected to decrease year on year.” However, in the latest report, they state: “Given the success of Bohemian Rhapsody and We Will Rock You in recent years, it is anticipated the company will generate similar income in the year ended 30 September 30 2023 and in the years thereafter.” Simply put, Queen is here to stay.
As of July 2023, the band was the 49th most popular musical act on Spotify, down from 44th spot a year earlier. But thanks to there being more people streaming on Spotify overall, the number of monthly Queen listeners is actually higher today than a year ago – 48.45 million listeners, up from 40.3 million.
A few years ago, MBW (Music Business World) estimated that a sale of Queen’s catalogue could bring in around R25 billion. Earlier this year, sources told MBW that Queen’s catalogue could sell this year for just about that amount, though other sources suggested the number could be even higher.
Such a sale would easily surpass the record-setting R9,4 billion-plus that Sony Music/Columbia and Sony Music Publishing paid for the recording and publishing rights to Bruce Springsteen’s entire catalogue in 2021.
As of May of this year, the initial stages of a sale process were underway, involving both music publishing and recorded music rights. Major music companies including UMG, as well as private equity groups, have been in discussions regarding the sale.
Bohemian Rhapsody holds the record for highest-grossing biopic of all time, with a worldwide gross of R1,7 trillion. A sale of Queen’s music rights could put another all-time record under the belt of a band that – 53 years after its formation and 32 years after the tragic death of its frontman – seems to be as popular as ever. – SOURCE: MBW
