Media giant looking beyond SA
NASPERS is considering a secondary listing abroad and will also look at separate listings for some companies within the group – including its South African and African pay-TV unit, CEO Bob van Dijk says.
The internet-holding company is considering these and other structural options to rein in its considerable discount to the value of its holdings. The group trades at a discount to net asset value of about 40%, far higher than what many analysts deem a fair discount for a holding company, namely 20%.
Listing the pay-TV business, which trades under the MultiChoice brand, in South Africa was a possibility and could help to unlock value and close the discount, Van Dijk said.
However, the process would not be easy if Naspers decided to go ahead with that option.
“It’s not straightforward. There are a number of considerations, for example, licence conditions and our Phuthuma Nathi [MultiChoice’s black empowerment vehicle] shareholders,” he said.
In December, Van Dijk told Business Times that Naspers was asking its traditional pay-TV business and print media operations not to lose relevance to customers, adding that all news and video entertainment would soon be consumed online.
“We want a highly liquid market and a different class of investors that we don’t already have.”
MultiChoice remains highly cash-generative and has contributed meaningfully towards the development of Naspers’s newer internet businesses.
But it faces new competition in the form of online streaming services such as Netflix. To counter the threat of new entrants it launched video-on-demand service Showmax in 2015 and has invested in local content.
But analysts say MultiChoice’s SuperSport bouquet will keep subscriber numbers in the traditional pay-TV business healthy.
Naspers would also consider listing classifieds businesses in the Netherlands, among a number of other options. Further, Van Dijk said the group was looking at numerous markets for a secondary Naspers listing, which could reduce the discount by introducing new investors to the group.
These markets included Hong Kong – where its crown jewel, Tencent, is listed – the Netherlands “and a few more”.
Van Dijk said reducing the discount was not the primary aim of Naspers’s decision to sell HK$77billion (about R115-billion) worth of Tencent stock – thereby reducing its stake in the Chinese technology giant from 33.2% to 31.2% – though redeploying that capital into its newer e-commerce businesses could supplement its efforts in that regard.