Amsterdam-based technology investor Prosus NV has announced plans to acquire up to 45.4 percent of shares in its parent Naspers of South Africa by issuing new Prosus shares in a deal aimed at moving part of the value of their massive stake in Tencent to Europe from Africa.
Naspers, which has a controlling stake in Prosus and would retain control, hopes the deal will improve valuations for both companies.
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Both trade at a discount to the value of the massive 28.9 percent stake that Prosus holds in Chinese software and gaming giant Tencent Holdings, worth 172 billion euros ($208.6 billion) at current market prices.
“The share offer we have announced today will extend Prosus’s standing as Europe’s largest internet company,” said Bob van Dijk, CEO of both companies, in a statement.
He stated that Prosus shareholders would benefit because the Naspers N shares that Prosus will purchase trade at a greater discount to the value of the Tencent stake than Prosus shares do. Naspers shares have recently traded at a discount of around 25% to Tencent stake value, while Prosus trades at a 15% discount.
According to the companies, Naspers shareholders’ share prices should trade more in line with the value of Tencent’s stake, and Naspers will continue to be the largest company on the Johannesburg stock exchange.
He stated that Prosus shareholders would benefit because the Naspers N shares that Prosus will buy trade at a higher discount to the value of the Tencent stake than Prosus shares do. Naspers shares have recently traded at a 25% discount to Tencent stake value, while Prosus trades at a 15% discount.
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According to the companies, Naspers shareholders’ share prices will trade more in line with Tencent’s stake value, and Naspers will remain the largest company on the Johannesburg stock exchange.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer