South African media and e-commerce group Naspers has gained stock exchange approval to spin-off and list Multichoice, Africa’s biggest pay-TV business by subscribers, the company said on Monday.
Multichoice stock will list on February 27, Naspers said in a Johannesburg Stock Exchange announcement, with the share capital going to current Naspers shareholders.
Naspers CEO Bob van Dyk said the company is proud to have built Multichoice into a “major success” and that it is well placed for the future.
“The strength of the company’s leadership team, alongside its compelling content, world-class technological capabilities and attractive financial profile means that it is very well positioned for future growth in an evolving sector on the African continent.”
Spinning off Multichoice is Naspers’ first major move towards narrowing a discount between its market value and the value of its stake in Chinese tech giant Tencent.
Naspers itself trades at a significant discount to its stake in Tencent, prompting some investors to urge Van Dyk to find ways to narrow it.
For Multichoice, the move frees up cash to help it compete with the likes of Netflix and other leading streaming services.
“With strong financials, the flexibility of an ungeared balance sheet and deep local knowledge, we hope to deliver excellent returns to shareholders over time,” Multichoice CEO Calvo Mawela said.