‘Stop Naspers value destruction’
R334bn of shareholder value has been destroyed –AIM&R founding partner.
Albert Saporta, director of Geneva-based investment advisory firm AIM&R, has written an open letter to Naspers CEO Bob van Dijk, accusing him of destroying R334 billion of shareholder value since his 2014-appointment.
AIM&R is a Naspers shareholder but Saporta wouldn’t disclose its stake. He writes to Van Dijk: “Since your appointment at the helm of Naspers, the value of the Tencent stake relative to Naspers’ market capitalisation has grown from 90% to 130% today and seems to accelerate. Correspondingly, as implied by the market, the value of Naspers’ dozens of other investments and businesses has declined from a value of R34 billion to negative R300 billion ... In the last three years, R334 billion of shareholder value has been destroyed.”
He calls Naspers an “inefficient” entry point into Tencent and proposes Van Dijk consider spinning-off Tencent to Naspers shareholders.
Naspers head of investor relations Meloy Horn says nobody at Naspers had received the letter.
Who is Saporta?
According to Bloomberg, Saporta is former head of research at Makor Capital’s research division and an AIM&R founding partner, with 30 years’ experience in global financial markets. He’ll lobby other Naspers shareholders and hopes the letter starts a review process that leads to a contraction of the discount at which Naspers is currently trading.
CEO compensation
Saporta says it’s unacceptable that Van Dijk’s compensation is based on a share option plan that rewards him for an increase in Naspers’ share price for which he’s “absolutely not responsible”. He also says Naspers investors are being doubly punished: a direct investment in Tencent would’ve earned them a 35% return versus the 24% Naspers delivered; and other Naspers businesses “are being implicitly and constantly devalued to the point of reaching a significant negative value”.
Naspers responds
Horn says Naspers takes issue with his “incorrect and myopic way of displaying the massive value creation for our shareholders”.