Prosus shareholders agree to share exchange

Prosus shareholders approve share swap to secure a 49 percent stake in Naspers.

A share swap deal between Prosus and Naspers will only succeed if Prosus convinces enough Naspers shareholders to relinquish their shares to guarantee Prosus a 49 percent stake in Naspers.

Although some Naspers shareholders expressed dissatisfaction with the deal, it was clear that the necessary resolutions to implement the scheme would be ratified at the Prosus extraordinary general meeting (EGM) that was held on 9 July.

Both Prosus and Naspers’s boards of directors and executive management teams supported the transaction, with Naspers indicating before the meeting that it was permitted to and would vote to swap the 73 percent of Prosus shares that it owns. As a result, the majority of votes had been cast before Prosus sent out the notice of the EGM.

“Shareholders are advised that the resolution relating to the voluntary share exchange offer as set out in the notice of the EGM was passed and adopted by the requisite majority of shareholders represented at the meeting,” Prosus said on Friday.

According to Prosus, nearly 93 percent of the total issued shares were represented at the meeting, implying that investors holding nearly 1.5 billion shares were able to vote on the proposal. Since not all shareholders bothered to vote or appoint a proxy to vote on their behalf, Naspers’s 73 percent shareholding carried a nearly 79 percent weighting in the final tally.

The share swap is a good deal for Prosus shareholders on its own. Although the swap ratio provides value to Naspers shareholders, Prosus is also acquiring Naspers shares at a slight discount by using its already undervalued shares.

Formal approval from Naspers shareholders is not required as the offer to swap their Naspers holdings for new Prosus shares is voluntary.

Speaking after the EGM meeting, Prosus and Naspers CEO, Bob van Dijk (pictured) said, “This enables those who wish to do so to tender some Naspers shares for Prosus shares.

“We believe that the transaction is a critical step in creating a capital structure expected to unlock value for both,” he added.