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Prosus terminates R85 billion deal to buy India’s BillDesk

by Radarr Africa
written by Radarr Africa

Prosus, the consumer internet arm of Naspers, a South African multinational technology company, says its $4.7 billion (R84.8 billion) deal to buy Indian digital payments provider BillDesk has fallen through after the transaction failed to meet certain conditions by the end of September.

The transaction, announced in August 2021, was subject to the fulfilment of various conditions, including approval by the Competition Commission of India which was received on September 5, Prosus said in a statement. However “certain conditions” were not met by 30 September, the firm said without going into details, adding that the “proposed transaction will not be implemented”.

BillDesk, which was founded in 2000, was once described by Naspers as “an Indian success story in the digital payments business”. Along with PayU India, the two businesses were expected to create a financial ecosystem handling four billion transactions annually.

Prosus had hailed the acquisition as a vehicle to meet the changing payment needs of digital consumers. It is currently looking to invest in markets with long-term growth potential, including Brazil and India, building on businesses in the online classifieds, food delivery, payments and fintech, as well as in educational technology.

The consumer internet company said it remains committed to the Indian market and growing its existing businesses within the region, having invested close to $6 billion in Indian technology companies since 2005.

Source: News24

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BusinessInformation & TechnologySouthern AfricaTechnology

Naspers in a bid to sell Prosus shares to fund its own share buyback

by Radarr Africa
written by Radarr Africa

Less than two months after Naspers and Prosus announced that they were offloading some of their stakes in Chinese tech giant Tencent to buy back their own shares, Naspers said on Wednesday it also wanted to start selling its shares in Prosus. It will use the proceeds to buy back its own shares.

“Subject to the requisite approval of the South African Reserve Bank (SARB) being obtained, Naspers intends to dispose of certain of the Prosus shares that it holds in order to continue to fund the repurchase of Naspers shares pursuant to the repurchase programme,” Naspers said in a market update.

Naspers and Prosus previously operated under a cross-holding agreement, which came into effect after a share swap in 2021. Under this, Prosus holds 49% of Naspers ordinary shares, and Naspers owns nearly 57% of Prosus ordinary shares.

A lock-up on the disposal of Prosus shares held by Naspers, as per the agreement, expires on Wednesday.

Naspers said it made an application to the SARB for the approval, and expects a ruling in the coming weeks.

Naspers and Prosus are trading at a large discount to their stake in Tencent. Their plan to offload Tencent shares is aimed at closing the gap. 

ALSO READ: Naspers, Prosus sells out stake in Chinese tech giant Tencent.

Since June, its shareholding in Tencent has dropped from 28.9% to 28.8%. 

“The discount to the group’s sum of the parts increased to an unacceptable level. Taking substantive action to reduce the discount is a priority,” Naspers said in June.

“The combination of the war in Ukraine, higher inflation and rising interest rates drove up the cost of capital and increased uncertainty,” it said. This combined with other factors, including a decline in the valuation of tech companies globally resulted in a decline in the group’s net asset value for the first time in years.

Source: News 24

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BusinessSouthern Africa

Naspers, Prosus sells out stake in Chinese tech giant Tencent

by Radarr Africa
written by Radarr Africa

Naspers and its subsidiary Prosus will slowly be selling off parts of its stake in Chinese tech giant Tencent in order to fund an open-ended programme to repurchase its own shares.

This comes as Naspers reported a 40% drop in core headline earnings to $2.1 billion, and Prosus a 23% reduction to $3.7 billion for the year ended March 31, due to “a period of slower growth at Tencent as it adapted to regulatory changes in China.” Group trading profit declined by 10% to $5 billion, while it reported group revenue growth of 24% to $36.7 billion. “The board of Naspers intends to declare the dividend as soon as practicable,” the group said in a separate update. 

A crackdown on technology companies in China has battered Tencent, and this in turn has weighed on Naspers and Prosus, who currently have a 28.9% stake in the company after selling 2% in 2021. Naspers share price is currently down nearly 24% since January, and fell over 35% since June 2021.

Naspers was however up over 11% in early Monday trading, while Prosus rose over 22% before levelling off at nearly 12%. 

ALSO READ: Investment firm sues South Africa’s Govt over SAA deal

The group said that like other tech companies it faced significant macroeconomic and geopolitical headwinds, leading to highly volatile capital markets in the latter part of the financial year.

“The combination of the war in Ukraine, higher inflation and rising interest rates drove up the cost of capital and increased uncertainty,” it said. This combined with other factors including a decline in the valuation of tech companies globally resulted in a decline in the group’s net asset value for the first time in years.

“The discount to the group’s sum of the parts increased to an unacceptable level. Taking substantive action to reduce the discount is a priority.” This action includes its share repurpose programme.

“Prosus will begin selling small numbers of ordinary shares in Tencent Holdings Limited held by the group regularly and in an orderly manner, while concurrently purchasing Prosus shares and Naspers shares pursuant to the repurchase programme, as long as the group’s trading discount to net asset value is at elevated levels,” the companies said.

The programme is expected to result in the sale of Tencent shares, and buyback of Naspers and Prosus shares on a daily basis.

The Naspers and Prosus boards said they still “have great confidence in Tencent’s long term prospects”, and said the programme will result in the group increasing its exposure to Tencent on a per share basis.  

“At elevated levels of trading discount, however, the Naspers board and Prosus board believe that repurchasing Prosus shares and Naspers shares and monetising part of the group’s Tencent holding in order to implement the repurchase programme, is in the best interests of Prosus, Naspers and their respective shareholders.”

The group said Tencent was supportive of the withdrawal by Prosus of its voluntary restriction on the sale of its Tencent shares.

Naspers and Prosus CEO Bob van Dijk said the group expects the repurchase programme to significantly increase net asset values per share.

“It will also rebalance our asset base towards our fast-growing non-Tencent assets, whose value we expect to increase overtime, while retaining exposure to Tencent’s significant value creation potential,” he said.

“We will continue to execute our long-term strategy to build valuable consumer internet businesses to deliver sustainable returns over the long term.”

The group said that as it initiated the buyback to “unlock value for shareholders”, it was also working towards maintaining an investment grade.

“In this regard, shareholders are referred to the announcement released by the group today outlining that it has realized approximately $3.67 billion through the disposal of its shares in JD.com and that such proceeds are to be retained by the group for general corporate and liquidity purposes.”

Source: NEWS24

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