Shareholders in Phuthuma Nathi, the black empowerment vehicle that owns 20% of MultiChoice SA, have the right to begin trading the shares next Thursday, 8 December, when a five-year lock-in period expires.

MultiChoice SA group CEO Imtiaz Patel says Phuthuma Nathi has 120 000 shareholders, the vast bulk of them black individuals.

Once trading opens next week, the shares may only be bought and sold by black individuals and groups (as defined in the scheme). Patel says this is to ensure MultiChoice continues to meet its broadcasting licence requirements in terms of its black shareholding.

The company is creating an over-the-counter trading system for Phuthuma Nathi shareholders and has set up a dedicated call centre and website for investors wishing to buy or sell shares.

Patel cautions it is not possible to place an exact value on the shares prior to the opening of trade next Thursday, adding that the shares will probably trade at a discount to the fair value of MultiChoice SA shares. The company, which is owned by JSE-listed media giant Naspers, has an implied market capitalisation of more than R50bn, based on research by stockbrokers.

Patel says Phuthuma Nathi shareholders should not be tempted into “short-term thinking” by trying to cash in immediately. “We want to get a message to people not to be tempted and [in the process] sell themselves short.”

The shareholders have done well from their investment, however, considering the purchase price was an effective R50/share (R10/share upfront and R40/share loaned to shareholders to help facilitate their purchase) and most analysts say MultiChoice shares — without factoring in that the Phuthuma Nathi shares will probably trade at some sort of discount — are now worth north of R120/share.

The shareholders have also received more than R2bn in dividends in the five-year period. — Duncan McLeod, TechCentral