Naspers, Prosus Post Strong Profit Growth
Finweek English|9 July 2021
Investors worry about the complexity of the companies’ share swap deal to narrow the discount to its net asset value.
Jaco Visser
Naspers, Prosus Post Strong Profit Growth

Holding companies have traditionally struggled to narrow the gap between their net asset value and the price at which its stocks are trading on bourses. Naspers*, and subsidiary Prosus, are no different.

In a two-pronged move to address the substantial discount at which Naspers and Prosus are trading to their technology-laden assets, the companies announced a share buyback in November last year. By the end of June, Prosus has bought back in aggregate $1.37bn of its own ordinary N shares (or 0.73% of its total outstanding shares) and $3.63bn in Naspers ordinary N shares (or 3.67% of its total outstanding shares). These were sweet windfalls to investors.

In addition, Prosus announced a share swap on 12 May where it aims to acquire more than 45% of Naspers’ outstanding shares in exchange for its own. The rationale, in chief, is to increase Prosus’ free-float on the Johannesburg and Amsterdam stock exchanges and reduce Naspers’ weighting in South African stock indices where it holds a dominant position. Prosus offers 2.27443 of its own N shares for each one Naspers N share.

This story is from the 9 July 2021 edition of Finweek English.

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This story is from the 9 July 2021 edition of Finweek English.

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