Naspers spin-off Pro­sus soars by a third in its Am­s­ter­dam mar­ket de­but

Business Day - - FRONT PAGE - Mudiwa Gavaza Tech­nol­ogy Writer Karl Ger­net­zky [email protected]­ /With

Naspers s new in­ter­na­tional list­ing surged by a third on its stock mar­ket de­but in Am­s­ter­dam on Wed­nes­day, valu­ing it at about R1.9-tril­lion and hand­ing Europe its big­gest con­sumer in­ter­net com­pany.

Pro­sus which has a sec­ondary list­ing on the JSE jumped as much as 29%, be­fore par­ing gains to trade at €73.19, well above an in­dica­tive price of €58.70 the Euronext ex­change had given prior to the list­ing, which also cre­ates the third­largest com­pany on the Euro­pean stock ex­change af­ter Shell and Unilever.

The list­ing re­lo­cates to Am­s­ter­dam a third of Naspers’s out­sized val­u­a­tion on the JSE, where fund man­agers had be­come forced sell­ers to avoid be­ing over­ex­posed to a sin­gle stock.

It is the big­gest step yet by CEO Bob van Dijk to re­duce a val­u­a­tion gap be­tween Naspers and its Chi­nese mon­ey­maker, Ten­cent.

Naspers CFO Basil Sgour­dos said the rea­son to list in Am­s­ter­dam was to give Europe its own tech gi­ant as North Amer­ica had Face­book and Google, while Asia had Ten­cent in Hong Kong. “There’s this great pent-up de­mand for great tech­nol­ogy and in­ter­net com­pa­nies. We’re now the largest we’re ac­tu­ally three times larger than the next big­gest tech com­pany and that will at­tract lots of in­ter­est,” Sgour­dos said.

Pro­sus’s sec­ondary list­ing on the JSE gives lo­cal in­vestors di­rect ac­cess to Naspers’s in­ter­na­tional assets.

Pro­sus, in which Naspers re­tains a 73% stake, in­cludes the com­pany’s prized one-third stake valued at $130bn in Chi­nese tech gi­ant Ten­cent, whose size had be­come both a money-spin­ner and headache for Van Dijk.

The stake has un­der­pinned Naspers’s rapid growth to be­come Africa’s big­gest com­pany by mar­ket value but had also dwarfed Naspers’s own mar­ket value, mean­ing in­vestors as­cribed no value to the com­pany’s other busi­nesses, which in­clude OLX, the big­gest clas­si­fieds ads site in In­dia and Brazil.

Naspers hopes the list­ing will open the com­pany up to new pools of cap­i­tal in fi­nan­cial cen­tres such as the UK, Ger­many, Switzer­land and the US, which Naspers has been ac­tively can­vass­ing in the past few weeks.

The share price per­for­mance on the first day of trad­ing is a vic­tory for Van Dijk and his man­age­ment as it means Pro­sus is worth roughly $6.4bn more than its hold­ing in Ten­cent, the owner of China’s big­gest so­cial me­dia plat­form WeChat.

“The prob­lem has al­ways been that the di­ver­si­fied port­fo­lio of global op­er­a­tions was not well un­der­stood by in­vestors in the SA mar­ket,” said Paul Theron, CEO of Ves­tact Asset Man­age­ment.

“Con­versely, global in­vestors and tech fund man­agers were al­ways put off by the pri­mary list­ing of Naspers in rand, in a sec­ondary cap­i­tal mar­ket like the JSE.”

Naspers, which re­tains its list­ing on the JSE and is left with me­dia assets and its on­line re­tailer Takealot, which make up 0.5% of its value, car­ried out the list­ing by of­fer­ing share­hold­ers an ex­change of their shares for stock in Pro­sus.

Current Naspers share­hold­ers have un­til Mon­day to elect if they want Pro­sus on a one-for-one ba­sis or more Naspers stock.

The com­pany’s share price closed 30% down at R2,465 on Wed­nes­day, as a quar­ter of its R1.07-tril­lion val­u­a­tion moved to Am­s­ter­dam.

Be­fore the spin-off, Naspers ac­counted for about a quar­ter of the JSE’s mar­ket cap­i­tal­i­sa­tion, a headache for lo­cal fund man­agers who have been forced to sell the stock when its val­u­a­tion rises to limit their ex­po­sure.

Many lo­cal in­sti­tu­tional in­vestors have capped their Naspers hold­ings at 10%.


Big step: The list­ing of Pro­sus is the big­gest step yet by Naspers CEO Bob van Dijk to re­duce a val­u­a­tion gap be­tween Naspers and its Chi­nese money-maker Ten­cent.

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