In recent years, Media24 has had to close a number of its magazines due to losses. When Naspers's interim results were announced in November, management said the print media segment of subsidiary Media24 continued to face structural declines. Print media across the globe is under pressure from digital alternatives, but analysts contend Media24 is under additional pressure due to its steep printing costs.
On Thursday morning, Novus Holdings, formerly known as Paarl Media Group, announced that its chairman, Lambert Retief, had died. Retief had been involved in the printing industry since 1978 and was the first CEO of Paarl Media Group.
Paarl Media Group was part of Media24 until 2015, when it was unbundled and listed on the JSE as Novus Holdings. The listing had been prompted by a move by Retief to sell his stake in Paarl Media Group to Media24. As a result of a tussle with Caxton before the competition authorities, the plan for the sale was abandoned and replaced by the listing.
Media24 and Retief argued that despite the former's major holding, control of Novus continued to rest with Retief. As a result of Retief's continued control, a printing contract between Paarl Media Group and Media24 remained in force when Novus was listed.
Industry sources say the terms of the contract favour Novus and account for a hefty portion of Media24's operating costs. Less than an hour after informing shareholders of Retief's death, Novus announced that the management deal between Novus, Media24 and Retief was now terminated.
"Media24 thereby has the right to terminate the existing contractual printing agreement with Novus Holdings on six months' written notice," the company said.
Novus and Media24 are engaged in negotiations regarding the printing agreements.
Source: Business Day
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