South Africa's Naspers to list internet assets on Euronext

The new entity will be Europe’s largest listed consumer internet company by asset value, with interests spanning online classifieds, food delivery, payments, e-commerce, travel, education, and social and internet platforms. It includes all of Naspers’ internet interests outside of South Africa. The conglomerate will hold a 75% interest in the entity.

Last year, Naspers pared its Tencent stake by about 2%, taking about $9.8 billion off the table. However, it still holds 33.1%, which is worth around HK$1.05 trillion ($133.5 billion). This is larger than the market capitalization for Naspers. Meanwhile, Tencent’s rising valuation has seen Naspers’ weighting on the JSE SWIX Index rise from 5% to 25% over the last five years – forcing many local investors to sell due to restrictions on exposure to individual stocks.

The proposed Euronext listing is expected to reduce the valuation discount and ease these structural constraints. “After a careful and comprehensive evaluation of the merits of strategic options available to the group, the listing on Euronext Amsterdam proved to be the most promising for our future growth plans and addressing the market dynamics we wish to tackle,” Basil Sgourdos, CFO of Naspers, said in a statement.

He also pointed to several other actions undertaken to create shareholder value, including the partial exit from Tencent, a full exit from Indian e-commerce marketplace Flipkart, and pushing its core internet businesses to achieve more growth, and in some cases, profitability. Naspers sold its 11.18% interest in Flipkart for $2.2 billion last year – generating an IRR of 32% – when Walmart bought a majority interest at a valuation of $20.8 billion.

The conglomerate still holds stakes in several other India-based assets, such as travel businesses MakeMyTrip, Goibibo and redBus, technology provider Byju’s, and Swiggy. As recently as last December, it led a $400 million investment in Byju’s and a $1 billion round for Swiggy, at valuations of $4 billion and $3.3 billion, respectively.

Naspers entered the Southeast Asia payments space in 2017, investing $5 million in Coins, a US-founded blockchain and financial technology company operating in the Philippines.

There are no other assets in China given the sheer size of Tencent. It has proved to be one of the most successful technology investments ever made. Naspers bought a 20% stake in Tencent from IDG Technology Venture Investment for $12.6 million in 2001 and then a 12.8% interest from PCCW Cyberworks Ventures. It is said to have committed $32 million in total and ended up with a 36.14% holding following Tencent’s Hong Kong IPO in 2004.

Naspers will retain its primary listing in South Africa, and will continue to directly hold its local assets – Takealot and Media24 – alongside its majority stake in the new entity. Non-Asian assets held by the new entity include classifieds platforms OLX, Avito and Letgo, food delivery services iFood and DeliveryHero, payments provider PayU, and internet platform Mail.ru.

The listing is expected to happen no earlier than the second half of 2019, pending regulatory and shareholder approvals.

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• Topics
• Greater China
• South Asia
• Southeast Asia
• IPO
• Technology
• Naspers
• Tencent
• China
• India