Share swop deal for JSE giant Naspers and subsidiary Prosus 'will affect us all'
Dutch-listed Prosus has announced its intention to make a voluntary exchange offer to acquire 45.4% of shares in Naspers, which is its parent company.
Global internet group Naspers dominates the JSE.
Amsterdam-based Prosus was created to try and realise the value of the massive investment Naspers has in Tencent in China.
Now Prosus is buying up shares in its parent company.
Naspers shareholders will be offered (new) shares in Prosus in return for their Naspers shares.
"Prosus intends to acquire 45.4% of the issued Naspers N Ordinary Shares in exchange for newly issued Prosus Ordinary Shares N, which would take its overall interest in Naspers to 49.5%, given the Naspers shares Prosus already owns."
Naspers will remain domiciled in South Africa as the JSE’s largest listed company and retains control of Prosus.
It's a convoluted deal says Bruce Whitfield.
He gets more detail from Basil Sgourdos, Group Chief Financial Officer (CFO) of both Naspers and Prosus.
At its core, the transaction is actually quite simple, says Sgourdos.
It's aimed at trying to solve a very unique and particular problem for Naspers. That is - today it makes up 23% of the JSE...Basil Sgourdos, Group CFO - Naspers
So, every time the Naspers market cap goes up, more South African funds have to sell down because it pushes them above their prudential limits. That's what we're trying to fix here.Basil Sgourdos, Group CFO - Naspers
What's on offer is quite straightforward Sgourdos insists.
"We offer Naspers shareholders the opportunity to swop their higher discount Naspers shares for lower discount Prosus shares."
This unlocks immediate value on the day he says.
But, more importantly, it allows future value creation to accrue in greater proportion because Prosus trades at a lower discount.Basil Sgourdos, Group CFO - Naspers
Naspers will still remain South Africa's largest company on the JSE and still be in full control of Prosus... which represents the offshore investments.Basil Sgourdos, Group CFO - Naspers
The transaction only closes in the third quarter and then plays out from there.Basil Sgourdos, Group CFO - Naspers
Listen to the detailed discussion of the implications of the share deal:
This article first appeared on CapeTalk : Share swop deal for JSE giant Naspers and subsidiary Prosus 'will affect us all'