Naspers & Prosus share price: Another Value Unlock
In the below article we breakdown the recent announcement that Prosus is looking to acquire nearly half of Naspers’s issued shares.
The Prosus offer for Naspers shares
The dual listed Prosus has recently announced its intention to buy 45.4% of the issued share capital of JSE listed Naspers. The offer would see the issue of new Prosus ordinary shares voluntarily exchanged for Naspers N Ordinary shares.
Suggested benefits of the transaction
The proposed transaction is expected to help unlock further value within the Naspers Prosus stable.
For Prosus the suggestion is that buying back shares at a discount to NAV (Net asset value) would immediately provide value to shareholders. Prosus’s index weighting would also be expected to increase which would become more attractive for passive fund investment into the company, which would in turn further extend its lead as the largest internet company listed in Europe. The transaction would also increase the Prosus free float which would assist in increasing overall trading liquidity.
For Naspers, the transaction would allow for shareholders to distribute shares and lessen the discount to NAV through the Prosus holding.
Conditions of the Prosus offer for Naspers
Prosus shareholders will be required to approve conditions of the proposed transaction and will be guided to further detail and a general meeting in the coming weeks.
Regulatory approval from the South African Reserve Bank has already been obtained, although other regulatory approval will still need to be obtained.
The Proposed Transaction will be subject to a minimum acceptance condition of 45.4% of the issued Naspers N Ordinary Shares.
When would the Prosus / Nasper transaction take place?
The proposed transaction, should it be approved is expected to take place in the third quarter of 2021.
New ownership values
Should the proposed transaction take place, it is expected that Naspers ownership of Prosus Ordinary Shares N would be reduced from roughly 73.2% to 57.2%. Prosus would in turn hold 49% of the issued Naspers N Ordinary shares.
In summary
- Prosus is looking to acquire 45.4% of Naspers issued share capital through a new share issue
- The deal is subject to regulatory and shareholder approval
- The move is another attempt to further unlock value through reducing the Naspers discount to NAV
- The transaction if approved will take place in the third quarter of 2021
- The Naspers holding of Prosus, if the proposed transaction goes ahead, would be 57.2%
- The Prosus holding of Naspers shares, if the proposed transaction goes ahead, would be 49%
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