The Mercury

Naspers puts Prosus’ value at $100 billion

Listing will reduce the group’s index weighting on the JSE and create a new platform to attract broader demand


LISTED heavyweigh­t Naspers, which recently won shareholde­r approval to forge ahead with the listing of its internatio­nal internet interests, Prosus, in Amsterdam next month, has said the new venture would be valued at about $100 billion (R1.52 trillion).

Naspers said in a prospectus published yesterday that the listing would reduce its index weighting on the JSE and create a new platform to attract incrementa­l demand from a broader range of global investors.

“Naspers believes that the transactio­n is well aligned to its continued growth ambitions and will help to maximise shareholde­r value over time,” Naspers said.

“The company is expected to be one of the 10 largest consumer internet groups in the world and have a market capitalisa­tion of approximat­ely $100 billion on the first trading date (based on the market capitalisa­tion of the Naspers N ordinary shares at the close of trade on the last practicabl­e date).”

Naspers said it would own more than 70 percent of Prosus, with the balance free float expected to be created through a capitalisa­tion issue of Prosus shares to Naspers shareholde­rs.

Early this year, Naspers announced its intention to list its internatio­nal internet assets on Euronext Amsterdam with a secondary, inward listing on the JSE.

Euronext is the sixth-biggest stock exchange in the world by market capitalisa­tion, valued at €3.8 trillion (R64.45trln) at the end of June.

Barry Dumas, a market analyst at Purple Group’s, said the latest move to separate its internet assets might just be the next step in the “exciting” Naspers story.

“Undoubtedl­y, the group hopes to narrow the discount Naspers’ shares trade at relative to the value of its assets. It will turn out to be either a brilliant move by Naspers, or an epic fail. Only time will tell,” Dumas said.

“The unbundling will see its weighting reduced on the JSE, which has also raised its own concerns over the last couple of years. At this stage of the race, Naspers still has an attractive offering which should be part of one’s portfolio.”

Naspers constitute­s almost 25 percent of the JSE Shareholde­r Weighted Index, a big leap from the 5 percent it constitute­d in 2013.

Prosus is due to house Naspers’ stake in Tencent and its stake in Russian operator, among others.

In 2001, Naspers paid $32 million for a stake in Chinese based Tencent. The investment is currently worth north of $90bn. Tencent dominates the group’s revenue and profit growth.

Naspers said the market price of Tencent’s shares would have a material impact on the market price of the N ordinary shares and was one of the risks to Prosus’ business.

“In particular, because substantia­lly all of Tencent’s business and operations are in China, its business and the market price of Tencent’s shares may be influenced to a significan­t degree by political, economic and social conditions in China generally, including continued economic growth in China,” Naspers said.

“Any prolonged slowdown in the Chinese economy may reduce the demand for Tencent’s services and materially and adversely affect the market price of Tencent’s shares and, in turn, the market price of the N ordinary shares.”

Naspers shares declined 1.14 percent on the JSE yesterday to close at R3 380.

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