Naspers may list units

Naspers, frustrated that investors give it no credit for its investments other than a stake in Chinese Internet behemoth Tencent, is considering listing some businesses on the stock market to highlight their value.

Naspers raised $9.8 billion (about R115 billion) this week selling 2% of its Tencent shares, and plans to use the money to accelerate the growth and scale of its e-commerce businesses, which could potentially be listed.

Even after the sale, the value of Naspers’ Tencent investment, about $159 billion, dwarfs Naspers’ market value of $121 billion. That means investors see no value in Naspers’ payment services, food delivery and classifieds operations.

“It is a priority for us to reduce the value gap,” CEO Bob van Dijk said. “One of the things that we are actively discussing with our board is listing separate business units. The discount largely exists because of these structural market-driven reasons, so we are actively discussing this.”

Under Koos Bekker, Van Dijk’s predecessor, Naspers invested $32 million in Tencent, the operator of the WeChat messaging service, in 2001, and the stake has grown so much that it’s come to dominate investors’ perception of the company. Naspers owns 31.2% of Tencent after this week’s share sale.

Van Dijk is looking to close the discount by turning his other investments, such as Romanian e-commerce platform eMAG, profitable. Naspers has invested as much as $10 billion in its online businesses at a 23% return rate, excluding Tencent, he said.

“It has given us confidence that we can build larger and more profitable e-commerce companies.” – Bloomberg

It is a priority for us to reduce the value gap. Bob van Dijk CEO Naspers