Naspers’s Prosus eyes the euros

After years of complaints about its failure to create big internet companies, Europe can claim a tech giant. How galling that the engineers responsible specialise in finance, not software. On Wednesday, SA’s Naspers boosted its value by listing a holding vehicle in Amsterdam. With more than $100bn of assets, the demerger is one of the 10 largest consumer tech groups.

The new group, Prosus, is Latin for “forwards”. But it is dominated by past achievements. Naspers was transformed by a 2001 bet on then unknown Chinese start-up Tencent. That 31% stake in the internet and gaming giant is worth a colossal $128bn. It overshadows other stakes in online classifieds, payments, travel and food delivery.

In March, when Naspers said it would spin off international interests, its shares traded at a discount of more than 40% to underlying net asset value, due partly to a conglomerate structure and governance issues that the Amsterdam listing cannot mitigate. Another more fixable cause was that Naspers had outgrown the Johannesburg bourse. Wednesday’s listing helps solve that, by shifting about a quarter of its market value to the Amsterdam free float, where many more fund managers can invest. By mid-morning, Prosus shares traded at a discount to net assets of about 20%. The discount on shares in Naspers, which retains three-quarters of Prosus shares, narrowed to about 35%. It is not the first to try this sort of trick. SoftBank, a pioneering backer of Alibaba, had some success when it floated its mobile telecom unit last December.

Naspers’s manoeuvre benefited investors. Others could gain too. A listed vehicle could help with acquisitions. It could start by bidding for Just Eat, the UK food delivery group undervalued by a bid from Takeaway.com of the Netherlands. Europe’s tech ambitions will benefit if Prosus bets lead to home-grown success. /London, September 12

© The Financial Times 2019