Naspers values Prosus at $100 billion

Investors have approved the listing of Naspers' Prosus.

Africa’s largest technology company by market capitalisation Naspers said on Monday that a newly created entity containing its international internet assets would be valued at about $100 billion (about R1.52 trillion). Naspers recently won shareholder approval to forge ahead with the listing of its Prosus in Amsterdam in September, a new entity that will include its stake in Chinese internet giant Tencent. Alongside the Tencent stake, the new company will hold businesses from Brazil to Germany in industries such as online food delivery and classified advertising.

The new group’s assets were valued at about $34 billion at the end of June, Naspers said in a statement on Monday. The value of Prosus (R1.52 trillion) means that the new entity will be valued at about a tenth of the JSE’s R13.36-trillion value. 

Naspers said in a prospectus published on Monday 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.

Naspers opted to list Prosus to ease its dominance of the JSE and hopes this will help to address the fact that its share price has been trading at a discount for some time.

In 2001, Naspers paid $32 million for a stake in Chinese based Tencent. The investment is currently worth north of $90 billion. 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.”