Naspers won’t spin-off Tencent stake – CEO

JSE-listed internet and media company Naspers says it does not plan to spin off its $114 billion stake in Tencent, Reuters reported on Monday.

It comes after a Geneva-based investment advisor accused Naspers CEO Bob van Dijk of destroying R334 billion of shareholder value over the past three years by not stripping-out its investment in China-based tech giant, Tencent.

“Since your appointment at the helm of Naspers, the value of the Tencent stake relative to Naspers’ market capitalisation has grown from 90% to 130% today and seems to accelerate. Correspondingly, as implied by the market, the value of Naspers’ dozens of other investments and businesses has declined from a value of R34 billion to negative R300 billion.

“This can be simply calculated by subtracting the value of the Tencent stake from Naspers’ market capitalisation. In other words, in the last three years, R334 billion of shareholder value has been destroyed,” the analyst said, as was reported by Moneyweb.

He called for Tencent to be unbundled to Naspers shareholders.

Naspers head of investor relations Meloy Horn told Moneyweb last week that the group has no plans to sell or unbundle its stake in Tencent, viewing it as an appreciating asset.

Naspers owes a large chunk of its valuation to its 33% stake in Tencent, which Reuters noted is worth about $114 billion, or 20% more than Naspers itself.

The company on Friday recorded solid results for the year to March 2017, increasing revenue by 19% year on year to US$14.6 billion.

Excluding acquisitions, disposals and currency movements, growth was 29%. Businesses outside South Africa contributed 80% of revenues, compared to 77% a year ago, the internet giant said.

Core headline earnings grew 41% to US$1.8 billion, while Naspers recommended the annual gross dividend be increased by 12% to 580 cents, from 520 cents previously.

• Internet revenue climbed 29% to $10.621 billion
• Ecommerce revenue climbed 11% to $2.929 billion
• Tencent revenue climbed 39% $7.506 billion
• Mail.ru revenue climbed 8% to $186 million
• Video entertainment was flat at $3.401 billion
• Media revenue declined 3% to $588 million

Shares in the company traded R21 lower on the JSEon Monday, to R2,616, giving it a market cap of R1.1 trillion.

Read: Naspers earnings soar as revenue climbs to $14.6 billion