Africa's biggest media company Naspers has sold a 15 percent stake in its core newspaper and magazine business to black investors for 730 million rand, it said on Wednesday.

Naspers, whose Media24 unit publishes top-selling newspaper Daily Sun, said it would sell up to 14.6 million shares in the unlisted firm to black South Africans via investment group Welkom Yizani, to meet affirmative action quotas.

The deal comes after Naspers, whose mostly Afrikaans newspapers were once the mouthpiece of the apartheid government, said on Tuesday it would sell a 15 percent stake in its lucrative pay-TV unit to black investors for 2.25 billion rand.

South African companies have to meet quotas on black ownership, employment and procurement as part of a government affirmative action drive meant to redress the imbalances of apartheid more than a decade after the end of white rule. Naspers opted to sell shares in its unlisted South African businesses rather than in the listed parent company, which is expanding into fast-growing emerging markets with a focus on India, China, Russia and Brazil.

Shares in Naspers had risen 1.06 percent to 123.29 rand by 0823 GMT, roughly in line with a Top-40 index of Johannesburg blue-chips amid some relief the empowerment stakes were not larger, and that the company had not sold listed shares, limiting the dilution to existing investors. The 15 percent is a lot more palatable than the 25-30 percent some people had feared and there is some relief they did not do a deal at group level, said Abdul Davids, portfolio manager at Allan Gray, which owns shares in Naspers.

PAY-TV LICENCE

Gray also noted that Multichoice, which runs Africa's only pay-TV network DStv with more than 1 million subscribers in its home market, needed to draft in black investors to secure a licence when the sector opens to competition this year.

South Africa's communications regulator has invited bids from companies wanting to run pay-TV networks, paving the way for alternatives to DStv, which includes news channels like BBC and CNN, movie channels and Africa's own version of MTV.

Bringing black investors on board at Media24 may also curry favour with the government and help it win contracts to publish school books or other public business. Critics say black economic empowerment enriches a small elite often with impressive political credentials rather than shifting wealth into the hands of ordinary black people. But analysts noted Naspers had made shares in its businesses available to all black South Africans at a bargain price.

Davids said the Multichoice deal values that unit at about 11.5 times this year's projected earnings, while analysts valued the business at about 16 times, even accounting for stiffer competition ahead.

Naspers said Welkom Yizani would fund the purchase of the Media24 stake by issuing up to 14.6 million Welkom Yizani shares at 10 rand/share to black South Africans and the issue of 58.4 million preference shares of 10 rand each to Naspers. Multichoice shares will also be sold at 10 rand each via a black investment group.

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