The Gleaner Company has been feared by the political forces of Jamaica for decades, as they know the pressure that the entity can wheel. The most telling evidence is the battle of socialism versus capitalism in the 1970’s when the paper relentlessly stood up against the then government of the day and won. If the political forces were fearful of the power of the Gleaner, combine the Gleaner with the other news media powerhouse in the country, RJR and the fear levels must have gone up several degrees since Wednesday’s announcement of the merger of the media business of the Gleaner Company, with that of RJR.
Oliver Clarke Gleaner chairman
The transaction, is to be pursued through a court approved scheme of amalgamation and will be a stock for stock deal. Radio Jamaica will issue 1.2 billion shares on a one for one basis to shareholders of The Gleaner Company in exchange for 100 percent of a newly formed subsidiary Gleaner Company (Media) Limited (GCML) which will hold the assets of the media entities of the Gleaner Company.
Simultaneous with the transaction, the remaining publicly traded Gleaner Company, with non-media assets comprising mainly real estate and other investments will be renamed. This will result in the shareholders of the Gleaner Company Limited owning 50 percent of Radio Jamaica’s stock and existing RJR shareholders owning the remaining 50-percent of the combined business.
The coming together will create the country’s leading Media Company, providing, print, online, radio, television, cable television and new media products and services.
The combined entity will have revenues of J$5.2 billion and assets of just under $4 billion. RJR had profit of $113 million for the year to March this year and Gleaner had a loss of $57 million for the year to December 2014. RJR had total assets of J$1.66 billion and the media segment of the Gleaner had assets of $2.17 billion.
“This combination creates a stronger company that delivers maximum value for our shareholders, greater career opportunities for our employees and superior experience for our customers,” said Christopher Barnes, Managing Director of Gleaner Company Limited. ”Both management teams have built industry-leading suites of products and services, and we’re excited to be part of delivering all of the possibilities to Jamaican consumers,” He added.
The expanded media group which will be renamed once the transaction is complete, is to be led by Chief Executive Officer, Gary Allen with Christopher Barnes as Chief Operating Officer. Lester Spaulding is to be Chairman with Hon. Oliver Clarke as Deputy Chairman.
“The current market, with the amount of existing players, is saturated; especially where there is low economic growth. When added to the recent moves by local telecoms to enter the media space, heightened competition is sure to put increased pressure on the industry. It is therefore very important that Jamaican media look also to shore up their resources in order to engage in the fast changing landscape, as well as to preserve the independence required for our media to do its work on behalf of the Jamaican people” Lester Spaulding stated.
The transaction close, subject to shareholder and court approval along with regulatory review and other customary procedures, is expected by the end of 2015.Radio Jamaica was listed on the Jamaica Stock Exchange (JSE) in 1994. The company is the parent entity in the RJR Communications Group. The members of the Group are RJR 94FM, FAME 95FM, HITZ 92FM, Television Jamaica (TVJ) and TVJ-Sports Network, Reggae Entertainment Television, RETV, and Jamaica News Network, JNN.
The Gleaner Company Limited, established in 1897, is the parent company of a group comprising media operations and investments in Jamaica, Canada, the United States and the United Kingdom. Publications include the 180 year old Gleaner Newspaper in continuous publication since 1834, The Sunday Gleaner, The Star and Weekend Star, the UK Weekly Gleaner, the Weekly Gleaner and Star in USA and Canada, Gleaner Online, Independent Radio Company (Power 106FM, Music 99FM), other print publications, websites and the Gleaner Archives.
This is a big merger and one that will require lots of skills to ensure that the mix of people who are involved can be brought together with little fall out and fall out there will be, if the full benefit is to be achieved from the merger. The greatest benefit will come from a large staff cut as areas of duplication in the newsroom and administration are eliminated.
Initially, the big winners will be the Gleaner shareholders who will be getting over $3 in value for sale of the Gleaner assets to RJR, in addition they will still have shares in the remnant of the Gleaner.
without having the benefit of an offer circular I see this as a hard pill for a shareholder of RJR to swallow. is the dilution worth it?