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Naspers, Prosus complete share swap, new cross-holding structure

‘The transaction increases the size of the Prosus free float and more than doubles its ownership of the group’s outstanding global consumer internet portfolio’ — Bob van Dijk.
Image: Bloomberg

Technology investor Prosus and its South African parent Naspers on Monday said they had completed a deal that sets up a cross-holding structure and moves majority ownership of their international assets to Amsterdam.

Bob van Dijk, Group CEO, Prosus and Naspers, said he was happy with the outcome of the deal, in the works since May.

“The transaction increases the size of the Prosus free float and more than doubles its ownership of the group’s outstanding global consumer internet portfolio,” he said in a statement.

“It will also help to rebalance the oversized weight of Naspers” on the Johannesburg Stock Exchange.

Under the deal, which was declared unconditional last week, Prosus bought 45% of Naspers shares, bringing its ownership in Naspers to 49% in all.

Under the cross-holding arrangement, Naspers owns around 57% of Prosus and will keep voting control. The two companies share a single board. Post-deal, Prosus has an economic interest of around 60% of the companies’ international assets, including the $167 billion worth of shares they own in Chinese internet giant Tencent .

The logic underlying the swap was that moving part of the companies’ assets out of South Africa might improve their valuations. Both trade at a large discount to the apparent value of the underlying assets they own, including the Tencent stake, and executives argued that one reason was Naspers’ dominance of Johannesburg stock indices.

Naspers listed Prosus for the same reason in 2019, but underlying assets continued to grow in value.

Prosus, sometimes compared with Softbank’s Vision Fund, is one of the world’s largest tech investors, with stakes in educational software companies, meal delivery firms and online marketplaces around the globe.

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other than tencent, does anything in the group actually generate cash? Takealot must owe shareholders about 15 billion in cumulative invested capital. The food delivery businesses are a black hole of losses. I doubt the media business in SA is a cash machine?

This management team comes up with complex solutions in an attempt to narrow a discount that were never going to work. They come up with mechanisms that increase rather than reduce complexity. That reduce rather than increase transparency. Truth is they are not really that concerned about the discount. Sure, they would like it to be narrower – why not – but not if it means threatening their ability to pay themselves billions whether or not they are adding value for shareholders. Priorities self evident.

Cross shareholding, cross shareholders. 50 shades of Fortress/Resilient all over again.

Can someone please explain in plain english.
How many Prosus shares are there and how many of those does Naspers own ?
How many Naspers shares are there and then how many Prosus is each Naspers worth ?

End of comments.

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