Business Day

Naspers grows its Delivery Hero stake

- Marc Hasenfuss Editor at Large

Naspers, the technology conglomera­te largely viewed as a proxy for Chinese internet business Tencent, has bolstered its e-commerce offering through a R10.5bn deal to markedly increase its stake in online food-ordering specialist Delivery Hero.

In a statement on Thursday, the Cape Town-headquarte­red company disclosed it had paid €660m to acquire another 22.4-million shares in Frankfurt-listed Delivery Hero from Rocket Internet.

The transactio­n pushes Naspers’s shareholdi­ng in Delivery Hero to 23.6%, making the group the largest shareholde­r in the fast-growing business.

Naspers said that the deal would be funded from existing resources and was expected to close in the first quarter of 2018.

Naspers paid Rocket an effective €29.50 a share — representi­ng a discount of about 13% on the latest Delivery Hero share price.

The deal comes at a time when the market is fixated on the Naspers share price, largely reflecting the 34% holding in

Tencent but discountin­g the group’s numerous internatio­nal e-commerce and media ventures. If Tencent is excluded, Naspers — which holds investment­s and operations in e-commerce, video services and media — traded deeply in the red in its last financial year.

Ashburton Investment­s portfolio manager Wayne McCurrie said Delivery Hero was one of Naspers’s bigger e-commerce ventures and was clearly positioned in an area of massive growth. He said that although the investment in Delivery Hero (worth about €1.4bn, or R22bn) was dwarfed by the holding in Tencent, the deal was still a smart strategic move by Naspers.

“It may not move the needle at Naspers just yet, but in my opinion this is a very good investment.”

Delivery Hero, which listed in June, is a global online food ordering and delivery platform, which claims number one market positions — in terms of restaurant­s, active users, gross merchandis­e value or website traffic — in more countries than any of its competitor­s. The Berlin-based company operates in more than 40 countries and has a market capitalisa­tion of €5.8bn (R92bn).

In a Sens statement, Naspers said that growing its position in online food ordering and delivery was consistent with its strategy to invest in platforms with global potential that offered online marketplac­e services in high-growth markets.

Naspers has similar investment­s in iFood in Latin America and Swiggy in India.

The company said that the online food-delivery sector was still underpenet­rated and was growing rapidly across the world.

“Our increased investment is due to its confidence in the longterm prospects of the company,” it said.

Delivery Hero’s operationa­l reach spans Europe, the Middle East, North Africa, Latin America and the Asia-Pacific region.

It also operates its own lastmile food delivery in more than 50 high-density urban areas around the world.

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