Naspers is too big for the JSE

Naspers is working to reduce its exposure to Johannesburg’s stock exchange as it seeks to narrow its valuation gap with flagship asset, Tencent Holdings.

The media and internet company owns about 31% of Chinese technology giant Tencent, yet the market values the stake at $25 billion more than Naspers as a whole. Reducing the deficit has long been a priority for executives as they scour the globe for new online investment opportunities and work to make more of its businesses profitable.

“We are too large for the JSE,” chairperson Koos Bekker said at yesterday’s annual meeting. Naspers is almost four times the size of the second-largest SAbased firm on the FTSE/JSE Africa All-Share Index. This means some money managers are forced to sell the company to keep their funds’ exposure below a minimum threshold, he said.

Naspers CEO Bob Van Dijk is working on how to reduce exposure to the JSE, and is looking at spinning off parts of the company into listings outside SA. Bekker added that this would be handled cautiously, as online businesses need scale to grow. – Bloomberg