Register (it’s quick and free) or sign in now. As can be seen from Figure 1 , these discounts to NAV have gone pretty much one way since Prosus listed on 11 September 2019. But the Prosus control structure makes it immune to outside influence on strategy and puts off a universe of active investors who want to have a say on its behaviour. Naspers owns 72.66% of Prosus, which trades in Amsterdam. “TulAmmo 223 REM 55 GR FMJ STEEL CASE 500 ROUNDS, 7 in Stock” 62¢/rd: 1000 for $620.00: TulAmmo .223 Remington Bulk Tencent: the … The all share rose 0.32% and the top 40 0.31%, The US middle-class split into lower and upper in the 1980s — only focusing on billionaires misses what this created in society entirely, The coronavirus pandemic presented many new challenges for SA, which may remain long after all restrictions are lifted, The decision to drop the anniversary of the party’s founding in 1912 is due to the rapid growth of the coronavirus’s second wave, The tech company declares dividends and pays out hundreds of millions of rand despite the PIC and GEPF wanting their money back, The court decision has underscored that no collective agreement with fiscal implications can be enforced if not backed by the Treasury, Twice-burnt Anglo American is looking at copper in Zambia again, but will not invest if unfavourable, uncertain policies remain, Free movement between Britain and the EU will end; pets may be a problem; and finance firms will lose their passport to offer services across the EU, Arbitration award against Jurie Roux in relation to unauthorised expenditure throws into question his appointment by rugby’s world governing body, Sarah Buitendach’s lust list of hot US hotels will have you California (and Florida and Tennessee and, and...) dreaming. Read more at the SA government's online coronavirus portal or use the 24-hour public hotline: 0800 029 999. That's where the move to … Business Day TV caught up with Ziyad Joosub from Nedbank CIB for his thoughts on this move. One of our largest aggregate portfolio positions is in the related companies of Naspers (a South African holding company), its subsidiary Prosus (a Dutch media conglomerate focused on the internet in emerging markets), and Prosus’s biggest investment, Tencent (a Chinese internet giant). It's not only billionaires that are the problem. This implies that Naspers has an effective $145bn in value just in Tencent (22% x $660bn). Van Dijk isn’t so much cutting the Gordian knot as learning to live with it. The Naspers share-price discount to the value of its Internet-heavy portfolio of assets is growing even amid a post-pandemic shift to digital technology.. Shares in South Africa-based Naspers have climbed this year, pulled up more than 30% by the jewel in the crown, the company’s 31% stake in Chinese Internet giant Tencent. That was all down to Tencent’s rapid growth, which helped Naspers grind out double-digit profits and deliver an uninterrupted flow of dividends. Prosus's discount to net asset value is 40%. The Dutch firm still became Europe’s largest tech company by market capitalization this week after SAP SE shares declined following a profit warning. The company is valued substantially less than its stake in Tencent alone. Now, Tencent’s market cap is $660bn in round numbers. MARKET WRAP: JSE rises for second day while rand slips amid Covid-19 spike. Even before the pandemic hastened the trend towards online shopping, food delivery and other technology platforms, and forced companies across the world to reckon with the new reality, Prosus investors were reluctant to give Van Dijk the thumbs up when he tried to buy a large UK food delivery business, Just Eat, for $8bn. Naspers owns 900,000 unlisted A-class shares, which carry 1,000 times more votes than ordinary shares, that kick in as soon as its Prosus stake falls to 50%. 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For one thing, shareholders should take comfort in the explicit recognition by Van Dijk that the global hunt for consumer internet takeover targets has pushed prices to levels that would be difficult to justify. Login to your OfferUp account to instantly connect with local buyers and sellers, shop, and manage your items. By Loni Prinsloo (Bloomberg) – Prosus NV plans to buy back a combined $5 billion of shares in the global e-commerce giant and its South African parent Naspers Ltd., a move designed to boost shareholder value and narrow a discount between the company and its stake in Tencent … Among challenges facing Prosus Chief Executive Officer Bob van Dijk is a persistent gap in the company’s valuation and its crown jewel: A 31% stake in Chinese giant Tencent Holdings. Buy Prosus for exposure to Tencent and high-risk, high-reward investments, but investors should not buy the stock hoping the discount contracts in the coming years. Prosus NV plans to buy back a combined $5 billion of shares in itself and its South African parent Naspers Ltd. in a move designed to boost shareholder value and narrow a discount between the e-commerce giant and its stake in Tencent Holdings Ltd. By Sandile Mchunu Nov 2, 2020. EDITORIAL: Tencent discount needs Naspers to give up control of Prosus CEO Bob van Dijk might have to wrestle with the valuation conundrum a while longer 10 November 2020 - 05:08 Tencent Investor Prosus Launches $5 Billion Buyback in Bid to Close Value Gap Naspers, Africa’s most valuable listed company and Prosus parent, has struggled to … In an attempt to narrow the discount and unlock value for shareholders, Prosus plans to launch a share buy back programme worth R81bn. WATCH: Is there a third way to extricate SA’s economy? But the discount to the overall Naspers portfolio has become even wider. Prosus’s own value was just 135 billion euros as of Thursday’s close, including other investments in online classified, payment and food delivery businesses. Currently, we estimate the Naspers discount to NAV to be c. 45.2% and the Prosus discount to NAV c. 30.2%. Van Dijk took over a consumer internet powerhouse, a top-10 global technology investor alongside Softbank, Facebook and Google. It’s a sensible use of the company’s $8.7 billion cash pile, most of which derives from the sale of some of its Tencent stake two years ago. And finance head Basil Sgourdos appears to acknowledge that there may be further actions to come: “We will also continue working on a series of initiatives to further address the consolidated discount to net asset value.”. At the end of the day, having a smaller discount to NAV would be a good thing for existing shareholders,” Treherne said. But he said that even if Prosus’s other assets were valued at zero, you would still be buying Tencent at a discount of about 20pc. Both Van Dijk and Sgourdos referred to the problematic discount of the Naspers and Prosus … Prosus is an Amsterdam-listed internet conglomerate. The focus on Prosus and Naspers has intensified as the companies deal with a valuation gap to Tencent. Tencent Investor Prosus Launches $5 Billion Buyback in Bid to Close Value Gap Naspers, Africa’s most valuable listed company and Prosus parent, has struggled to … Naspers holds 72% of Prosus and Prosus owns 31% of Tencent. That could help narrow the discount. Navigate Preview company Navigate Next company. With M&A deals largely out of the question and having signed a three-year lock-up to not sell any more of Tencent, Naspers should consider selling down its stake in Prosus to boost its free float in Amsterdam and attract more European institutional investors. Having failed to clinch before valuations went through the roof and still grappling with the long-standing valuation mismatch,  he was left with little choice than to hand the money to shareholders. Prosus N.V., or Prosus, is the international internet assets division of Naspers. Please read our Comment Policy before commenting. Prosus, he argues, is simply Naspers by another name. In research on Smart Karma on January 22, Artherton points out that direct investment in Tencent since the Prosus listing would have outperformed buying either Naspers or Prosus. In the days immediately after the Amsterdam listing in September 2019, the ploy proved successful, as Prosus traded closer to the value of its holding in the Chinese firm. Over the same period of time, Naspers has risen 32.7% and Prosus … WATCH: Will bitcoin continue its upward trend in 2021? It’s a good thing. Why would the European tech company invest in anything but Tencent? The focus on Prosus and Naspers has intensified as the companies deal with a valuation gap to Tencent. Prosus said on Friday it would purchase up to R82 billion in its own and parent Naspers shares, as part of efforts to narrow a discount between its share price and underlying assets. No matter how fast the Prosus team runs to chase down the discount, the Tencent team will be running considerably faster driving it up.Being the Internet, there might of course be some totally unseen and currently unseeable scenario that could p Prosus’s own value was just 135 billion euros as of Thursday’s close, including other investments in online classified, payment and food delivery businesses. Prosus N.V., or Prosus, is the international internet assets division of Naspers. South African e-commerce group Naspers is listing its international internet assets, including its 31% stake in China's Tencent <0700.HK>, in Amsterdam on Wednesday under the name of Prosus. Prosus hopes to close discount to NAV with $5bn share buyback. Talk about nice-to-have corporate headaches, Bob van Dijk, the boss of Prosus, a unit of Naspers’ global internet behemoth, will tell you all about it. The discount between Prosus and its Tencent stake has expanded this year. At the end of the day, having a smaller discount to NAV would be a good thing for existing shareholders,” Treherne said. Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. Therefore, Naspers holds an effective 22% of Tencent (72% x 31%). It is the latest attempt to narrow a persistent gap between the company's market value and that of its stake in China's Tencent Holdings Ltd. ... capitalize on the discount. DURBAN - PROSUS shares rose more than 5 percent on the JSE on Friday after the Dutch technology giant said it intended to buy back up to $5 billion … If Prosus is included in the Eurostoxx 50 index in September as expected, it’s hoped the investment inflows will drive the price up and help narrow the discount between Prosus and Tencent… As of February 10, the Naspers discount to NAV was 42.6%, at the upper end of its … But just weeks after the listing, Prosus made a 4.9 billion-pound ($6.4 billion) bid to acquire the British food delivery platform Just Eat Plc. The company is valued substantially less than its stake in Tencent alone. Naspers has long traded at a discount to the value of its Tencent stake alone. The spin-out from Naspers was intended to reduce the discount at which the company traded to its Tencent stake. And that might be what shareholders need. Given that Naspers is worth roughly 30% less than the value of its 73% stake in Prosus, Van Dijk’s series of actions, including separately listing Prosus in Europe, have failed to narrow the discount. The buyback ought to provide some reassurance to investors that van Dijk is wary about overspending on deals, though he can always sell more Tencent stock to fund massive acquisitions when a lockup expires next year. The Naspers/Prosus double-discount structure, coupled with excessive executive remuneration in the view of many market analysts, is a major headache that will be difficult to rectify. This begs the question: Why would Prosus Chief Executive Officer Bob van Dijk put the company’s money in anything else? But equally, why invest in Prosus shares to get exposure to Tencent when you could just invest directly in Tencent itself? eBay’s classifieds business, but the US company chose another bidder. ... Prosus, unbundled from Naspers last year, also owns a 31 percent stake in Tencent. Van Dijk learned the hard way that shareholders are skittish about how Prosus uses its funds for new dealmaking. Prosus is a global consumer internet group and one of the largest technology investors in the world Go to content. (Bloomberg Opinion) -- Prosus NV, which became Europe’s largest technology company this week, has always been something of a Gordian knot for investors.The Amsterdam-based company derives the entirety of its 141 billion-euro ($165 billion) market capitalization from its 31% stake in Tencent Holdings Ltd., the Chinese e-commerce giant. Tencent is at the very centre of the global metaverse; Prosus is on the edge trying to pick up scraps. Naspers holds 72% of Prosus and Prosus owns 31% of Tencent. Before it's here, it's on the Bloomberg Terminal. Prosus is a venture capitalist, making high-risk high-reward investments. To contact the author of this story:Alex Webb at awebb25@bloomberg.net, To contact the editor responsible for this story:Nicole Torres at ntorres51@bloomberg.net. Now, Tencent’s market cap is $660bn in round numbers. The listing by South African media conglomerate Naspers of assets including part of its Tencent stake via the new Prosus vehicle in Amsterdam in September was heralded as a way to reduce the deep discount to net asset value (NAV) at which Naspers shares trade.. Other business … How much tax will be payable on the sale of a house held in trust? If the Unemployment Insurance Fund isn't used to benefit workers now it might have to fund more jobless workers in future, Rand weakened in early trade as investors sought the safety of US treasuries, The state is abrogating its duty by not enforcing proven safety protocols to prevent Covid-19, South Africans should learn not to take our hard-won democracy for granted, Natural gas burns cleaner than other fossil fuels but it is a fossil fuel nonetheless and the world is drawing away from it, EDITORIAL: Tencent discount needs Naspers to give up control of Prosus, CEO Bob van Dijk might have to wrestle with the valuation conundrum a while longer, He walked away from the deal earlier in 2020 but to be back in the M&A scene a few months later when he put in a $9bn cash offer for. Both Van Dijk and Sgourdos referred to the problematic discount of the Naspers and Prosus … There should be a discount to listed net asset value (NAV) of about 25% for Prosus and about a further 20% for Naspers, says Malan. Prosus (OTCPK:PROSF) is selling at approximately a 30% discount to net asset value. © 2020 Arena Holdings. Indeed, it trades at a $59 billion discount to the value of that holding, meaning that investors essentially ascribe a negative value to its other investments, such as Russia’s Mail.Ru Group Ltd. and Brazilian food delivery platform iFood. Would you like to comment on this article or view other readers' comments? Photographer: Deng Qingle/China News Service. The company’s shares tumbled, reopening the valuation gap to the Tencent holding. Tencent: the … Prosus shares closed 2.97 percent up at R1 626.93, while Naspers shares closed 3.98 percent higher at R3 152.32. Macron and Merkel Get the Least Bad Brexit Option, California Goes It Alone in the War on Covid, Refugees Shouldn't Monopolize the Immigration Debate, How Biden’s Iran Policy Can Have a Chance to Succeed. The Amsterdam-based company derives the entirety of its 141 billion-euro ($165 billion) market capitalization from its 31% stake in Tencent Holdings Ltd., the Chinese e-commerce giant. Prosus said last month it … Following a c. 24% rally in the Tencent share price (Naspers owns a 31% stake of the Hong Kong-listed tech Group, which accounts for >80% of Naspers’ net asset value [NAV)]) from c. 4 December 2019 to Monday’s (13 January) close, we highlight what has happened to the Naspers and Prosus discount to NAV below. Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January. He walked away from the deal earlier in 2020 but to be back in the M&A scene a few months later when he put in a $9bn cash offer for eBay’s classifieds business, but the US company chose another bidder. It is hard to see Naspers giving up that control, meaning Van Dijk is likely to wrestle with the valuation shortfall for a while longer. The company’s shares tumbled, reopening the valuation gap to the Tencent holding. An investor needs to trust that Prosus’ high-risk, high-reward investments and the Tencent … The massive Tencent stake is funding these risky investments. But just weeks after the listing, Prosus made a £4.9-billion bid to acquire the British food delivery platform Just Eat. Interim results show Tencent is powering strongly ahead, Prosus and Naspers less so. READ MORE Naspers still a discounted venture capital fund after Prosus listing. Prosus shares closed 2.97 percent up at R1 626.93, while Naspers shares closed 3.98 percent higher at R3 152.32. It is the latest attempt to narrow a persistent gap between the company's market value and that of its stake in China's Tencent Holdings Ltd. ... capitalize on the discount. As the world went into meltdown, life has been good in the happy little bubble that is Taiwan. In an attempt to narrow the discount and unlock value for shareholders, Prosus plans to launch a share buy back programme worth R81bn. 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