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MBC Group buys into Anghami: MBC Ventures, the VC arm of regional broadcaster MBC Group, has acquired a 13.7% stake in Abu Dhabi-based music-streaming platform Anghami, buying 4 mn ordinary shares, Anghami said in a regulatory filing.
The transaction is worth about USD 4 mn based on Anghami’s share price (USD 1.00 a piece) on 19 March 2024 — the last trading day before the transaction was disclosed — according to Music Business Worldwide. Anghami’s shares rose 59% on the day of the transaction to USD 1.59 a piece and it closed at USD 1.74 a piece on Friday —bringing the total value of MBC’s holding in the music service to USD 7 mn.
Dodging a bullet: Anghami’s shares plunged below the USD 1.00 minimum threshold set by Nasdaq last year, triggering a warning notification by the exchange for the company to get back into compliance within six months. The company said at the time it would consider a reverse stock split if it didn’t get its share price back above USD 1.00.
Uh, Enterprise? What’s a reverse stock split? The awkward term refers to a form of consolidation: It’s when a company reduces the number of outstanding shares such that shareholders receive fewer shares than they previously owned, but the value of each share is proportionally increased. For example, a 2:1 reverse split would see shareholders get one share worth USD 2.00 for every two shares they held at USD 1.00 each.
Anghami’s net losses rose 3x to USD 61 mn in 2022, while its revenue increased 37% y-o-y to USD 48.5 mn, according to a regulatory filing. The company’s revenue rose 8% y-o-y to USD 30 mn in 9M 2023, while its gross profit margin increased 22% y-o-y and its subscriber base grew 17% y-o-y to 1.7 mn.
What’s in it for them: The transaction boosts Anghami’s reach and content given the extensive distribution network of MBC, including non-subscription channels and paid streaming services such as Shahid VIP. For MBC, the investment expands its presence in the streaming market.
WHAT’S NEXT- A merger with OSN+ this quarter: Anghami agreed in November 2023 to merge with Dubai-based TV satellite and streaming company OSN+, according to a joint statement. This will be in the way of a USD 50 mn investment from OSN Group at a valuation of USD 3.65 per share (2x the current share price), making it a major shareholder in Anghami. The transaction is expected to reach a close this quarter. The new video-music platform would have a total of 120 mn users, 2.5 mn paying subscribers and USD 100 in revenue at closing.
