Prosus to buy shares in parent Naspers as valuations lag Tencent stake

Photo: Bloomberg

Amsterdam-based technology investor Prosus NV announced plans on Wednesday to acquire up to 45.4% of shares in its parent Naspers of South Africa by issuing new Prosus shares in a deal aimed at moving part of the value of their massive stake in Tencent to Europe from Africa.

Naspers, which has a controlling stake in Prosus and would retain control, hopes the deal will improve valuations for both companies.

Both trade at a discount to the value of the massive 28.9% stake that Prosus holds in Chinese software and gaming giant Tencent Holdings, worth 172 billion euros ($208.6 billion) at current market prices.

“The share offer we have announced today will extend Prosus’s standing as Europe’s largest internet company,” Bob van Dijk, CEO of both companies, said in a statement.

He said Prosus shareholders would benefit as the Naspers N shares Prosus will buy trade at a deeper discount to the value of the Tencent stake than Prosus shares do. In recent weeks Naspers shares have traded at a discount of around 25% to the Tencent stake value, while Prosus trades at a 15% discount.

Naspers shareholders should see their share price trade more in line with the value of the Tencent stake, and Naspers will remain the largest company on the Johannesburg stock exchange, the companies said.

They said they expect the deal to be implemented in the third quarter of 2021.

Naspers has struggled with its relative dominance on the Johannesburg exchange and its shareholders have long lobbied for the company to reduce the valuation gap.

Last month Prosus sold 2% of Tencent for $14.7 billion, in one of the largest strategic moves since its 2019 public listing in Amsterdam — with both steps intended to manage the unwieldy Tencent stake.

The deal would increase Prosus‘s float on the Euronext stock exchange to around 42.8%, or an 60% economic interest in the underlying assets, from around 27% at present, making it eligible for inclusion among indexes of Europe’s largest companies.

In addition to the Tencent stake, Prosus owns stakes in or operates an array of consumer internet companies, including the OLX online classifieds marketplace around the world, Swiggy in India and iFood in Latin America.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.