Naspers has announced that its subsidiary, Prosus intends to acquire up to $5 billion in total of Naspers and Prosus shares.
“This is a further step to crystalise value for shareholders,” it said in a statement, and follows earlier actions such as the unbundling of MultiChoice Group and the listing of Prosus on Euronext Amsterdam last year.
The purchase of Naspers and Prosus shares also represents a meaningful investment in the group’s strong internet portfolio, the group said by way of a rationale for the transaction. “It is regarded as a good use of capital, given full market valuations evident in consumer internet M&A and the group’s sizeable consolidated discount to net-asset-value (NAV).”
Bob van Dijk, chief executive officer of Prosus and Naspers, said: “We have found several large M&A opportunities in our sector to be fully priced and have stayed disciplined. 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.”
In total, up to $5 billion in shares in Naspers and Prosus will be purchased on the open market on a pro-rata (72.5%/27.5%) basis in line with the economic stakes of both companies in the Prosus/Naspers asset base.
These purchases will be funded from cash resources. Prosus intends not to vote the Naspers shares acquired. It is expected that the Naspers shares acquired will be held in treasury and will thus be excluded from Naspers per share financial metrics, the group said.
Prosus intends to launch the purchase following the release of its results for the six-months ended 30 September 2020. This is expected on 23 November 2020. The purchases and programmes will be implemented opportunistically and in such manner as can be comfortably executed in the market.