Johannesburg - Shareholders of Kagiso Media are set to receive R28 million from the sale of the company to New Africa Investments Limited (Nail).
Kagiso Media directors have decided to pay the premium, which represents 22c a share, prior to the final implementation of the sale and winding up of the firm next month.
The acquisition of Kagiso Media for R376,7 million by Nail was formally concluded last month.
Supporting the sale are controlling shareholder Kagiso Trust Investment and VideoVision, which jointly hold 55,6 percent of Kagiso Media's issued share capital.
Shareholders are due to vote in a general meeting scheduled for September 13.
An estimated R10,2 million, or 8c a Kagiso Media share, is expected to accrue to shareholders as distribution when the company is finally wound up.
Kagiso Media last year returned R85 million in surplus capital to shareholders.
The sale to Nail is expected to face regulatory hurdles created by local ownership restrictions of media assets. Control of more than two AM or FM radio stations is prohibited, although there could be regulatory flexibility if an empowerment case is presented to the Independent Communications Authority of SA.
Foreign ownership of broadcasting licences is limited to 20 percent, which has raised renewed concerns about the growth prospects of South Africa's broadcasting sector if it cannot attract huge foreign investment.
A review of ownership restrictions is expected to feature prominently in the Amendment Bill on the Broadcasting Act of 1999, due to be tabled in parliament later this year.
Kagiso Media's stock was stable at R3 a share, 5c more than the sale price, while Nail gained 3c to close at R1,75 on the JSE Securities Exchange yesterday.