Naspers may sell pay-TV unit

Naspers is considering the sale of its pay-TV business in Africa as sluggish economic expansion in key markets stifles growth and viewers switch to cheaper online alternatives, according to two people familiar with the matter.

A disposal of MultiChoice would not include the South African division, which is still highly profitable, said the people, who asked not to be identified as the plans have not been made public. A sale was one option being considered by Africa’s biggest company by market value and a final decision had not been reached, the people said.

Naspers and MTN Group, Africa’s largest wireless operator, briefly discussed a deal for MultiChoice Africa, but no agreement was reached, one of the people said.

Both companies confirmed on Thursday they were still in talks that were disclosed earlier about sharing TV content. MyBroadband, a South African internet news site, reported earlier that MTN was in talks to buy MultiChoice Africa, citing unidentified people.

A sale of MultiChoice Africa would represent a further shift by Naspers away from its traditional media business, which include newspapers and MultiChoice’s main product, the DStv satellite-TV service. Since winning big with a 2001 investment in Chinese technology company Tencent Holdings, a stake that is now worth about $107bn, Naspers has become a serial investor in internet companies around the world, ranging from an online travel agency in India to education software providers in Silicon Valley.

The Tencent stake value is worth more than Naspers’s market value of R1.2-trillion, ($89bn), which partly reflects the weak performance of the TV division. While the company arrested a decline in subscriber numbers over the six months to September, earnings before interest, taxes, depreciation and amortisation at the unit declined 33% to $331m.