It’s hard to apply much from a fundamental perspective to predict where this discount should be and hence where it goes from here. Bottom Line: With active managers having proved their reluctance to invest in Naspers, an influx of passive tracking investments is the best chance for a reduced discount at Prosus. If you are interested in www.streetinsider.com content, APIs are available. “On balance, the proposed buyback of Naspers and Prosus shares is largely positive. COPYRIGHT (C) 2020 ANCHOR GROUP LIMITED | Reg #2009/005413/06 | Vat #4380267833 © 2020 Independent Online and affiliated companies. “A significant share price move at Tencent could easily offset the benefits of this $5bn proposed share buyback, so it is important to consider all the moving parts when investing based on a corporate event such as this one,” Takaendesa said. Prosus said it intended to buy back up to $1.37bn of its own shares and up to $3.63bn of Naspers shares after the release of its half-year results, which were expected on November 23. Wake up to the essential with the Editor's picks. Short-term progress in increasing insurance penetration in Africa will be a victim of pressure from the “Big Six” global reinsurers to increase prices, says Ryan Phillips, chief operating office at Afro-Asian Insurance Services. Prosus, he argues, is simply Naspers by another name. Please contact us here http://www.streetinsider.com/signup_content.php. Posted on Wednesday, 19 February 2020 11:45. Yet five months later, the discount persists. “All they seem to have tried is to find additional sources of demand for the shares in Europe.”. All rights reserved. Navigate Preview company Navigate Next company. Prosus said it intended to buy back up to $1.37bn of its own shares and up to $3.63bn of … Naspers has announced that its subsidiary, Prosus intends to acquire up to $5 billion in total of Naspers and Prosus shares. This will create a bit of a circular holding structure,” Treherne said. In a statement, the European-listed Prosus says this is a further step to crystalise value for shareholders. DURBAN - PROSUS shares rose more than 5 percent on the JSE on Friday after the Dutch technology giant said it intended to buy back up to $5 billion (about R81bn) in its own and Naspers’ shares, in an effort to reduce the discount between the companies’ share prices and their underlying assets. At the end of the day, having a smaller discount to NAV would be a good thing for existing shareholders,” Treherne said.
“Management and the Naspers and Prosus boards are committed to delivering long-term returns for shareholders. The listing by South African media conglomerate Naspers of assets including part of its Tencent stake via the new Prosus vehicle in Amsterdam in September was heralded as a way to reduce the deep discount to net asset value (NAV) at which Naspers shares trade. The massive Tencent stake is funding these risky investments. With Nigeria's debt market becoming even more unattractive to foreign investors, Nigerian investors’ only viable trading option will be the country’s now bullish stock market.
Prosus intends not to vote the Naspers shares acquired. The announcement follows earlier actions such as the unbundling of MultiChoice Group and the listing of Prosus on Euronext Amsterdam last year. Prosus shares closed 2.97 percent up at R1 626.93, while Naspers shares closed 3.98 percent higher at R3 152.32. “Utilising cash to own more of our current portfolio through a purchase of our own shares – when the discount to NAV is sizeable – is a sensible use of capital.”. Prosus, as is well known, owns significant listed stakes in Tencent, Mail.ru, Delivery Hero, and Ctrip. Shareholders opted instead to back the board’s recommendation and go with the offer from Takeaway.com. The combined listed value of these businesses is $169bln,… The decision around index inclusion is usually in September, but can happen earlier if one an existing Euro Stoxx 50 member disappears through corporate action. Basil Sgourdos, CFO of Prosus and Naspers, comments: “Over the years, our group has achieved improved financial flexibility. “A direct investment in Tencent gives you a small yield and the ability to redeploy capital elsewhere. DURBAN - PROSUS shares rose more than 5 percent on the JSE on Friday after the Dutch technology giant said it intended to buy back up to $5 billion (about R81bn) in its own and Naspers’ shares, in an effort to reduce the discount between the companies’ share prices and their underlying assets. Artherton points to the loss of control over proceeds from Tencent which investing in Nasper entails. Management has ample options at hand to address the discount. SA investors being forced sellers of Naspers might explain why the discount has widened recently for Naspers, but what we find interesting is that Prosus has seen a similar widening in its discount and does not have the same problem. Our sense was that Prosus shareholders were not particularly positive on this deal and fearful that Prosus was overpaying for Just Eat.
The board of directors of Prosus (the Prosus Board) is of the view that the Proposed Transaction is a timely investment in the group’s strong internet portfolio, which is a sensible use of capital given full market valuations in consumer internet M&A, and the sizeable discount to the group’s NAV. Figure 1: Naspers and Prosus: Discounts to NAV. DON'T MISS : Talking Africa New Podcast – As #EndSARS escalates, Nigerians ask: who's in charge, By David Whitehouse Naspers's Prosus eyes $5bn share buyback plan. After completing the CAPTCHA below, you will immediately regain access to www.streetinsider.com. In the absence of a big correction in the Tencent share price though, the commitments that Prosus management have made to take further steps to address this discount in the medium term suggest that we are at levels from which there should be good upside if management does indeed follow through.
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