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