Spinoff From Global Entertainment Group Set For Organic Growth
For those who are unfamiliar with the name, it’s worth getting used to. Naspers Ltd (NPN SJ) is not only the biggest African company but is transforming itself into a global investment internet and entertainment company. With considerable investments in some of the world’s leading internet platforms (such as China’s Tencent), NPN will be Spinning off Africa’s leading pay-tv player, MultiChoice Group (MCG), to unlock value for shareholders.What's Interesting? The Edge Intelligence...
Once a media and internet company to now a diversified global investment company in internet and entertainment, the South African giant Naspers Ltd. (NPN SJ) will be spinning off Africa's leading pay-tv platform, MultiChoice Group (MCG), as part of its restructuring efforts first announced on September 17, 2018. Naspers holds considerable investments in some of the world’s leading internet, video entertainment and media platforms such as a 28% stake in Mail.ru (LSE: MAIL), the largest internet company in Russia, a 43% stake in MakeMyTrip Ltd. (NASDAQ: MMYT), India’s largest online travel booking company as well as NPN’s crown jewel 31% stake in one of the top three internet players in China, $400bn market cap Tencent (SEHK: 00700).
Based on NPN’s evolution over the years becoming a high-growth global internet business, it has moved away from its focus like MultiChoice Group (MCG) and as such will unbundle this and other non-core assets. The 100% separation will have a distribution ratio of one share of MCG for every one share of NPN held as of the record date (set for March 1, 2019). MCG will start trading separately starting February 27, 2019, while the unbundling transaction is due to be completed on March 4, 2019.
The Edge View…
Currently, based on NPN’s 31.2% stake and Tencent’s market cap of $418bn, the market valuation of NPN should be at least $130bn, not to mention NPN’s other listed and non-listed holdings. However, the company trades at a significant discount at only $98bn. NPN has been exploring ways to narrow this discount and ways to unlock value.
Listing MultiChoice Group (MCG) via this Spinoff aims to unlock value for Naspers shareholders by allowing shareholders to monetize on MCG’s pay-tv business, which is already a market leader throughout Africa. Likewise at the same time create an empowered, top 40 JSE-listed African video entertainment company. We like the fact that MCG will have minimal financial debt on listing, and it provides the necessary financial flexibility to pursue growth opportunities in the African video entertainment space.
Naspers and its operating subsidiaries, joint ventures and associated companies are engaged in the operation of pay television and the provision of related technologies, the operation of internet and instant messaging subscriber platforms, e-commerce platforms and the publishing, distribution and printing of magazines, newspapers and books. These activities are conducted primarily in South Africa, sub-Saharan Africa, China, Central and Eastern Europe, Russia, India and Brazil. Co. is organized into three business segments: Electronic media; Print media; and Corporate services.
The Edge Group - Global Fundamental Catalyst Investing. The Edge provides investors with access to hidden corporate value from Global Special Situations using a pioneering approach to investments. Founded in 2005 by fund management and investment banking professionals to provide high quality, private equity-level research on Global Corporate Divestitures for the benefit of fundamental event-driven, growth and value-oriented investors in this difficult to track, but proven investment space.
The Edge will look to screen and analyze include Spinoffs; Reverse Morris Trusts; Squeeze Outs; Privatizations; Demutualization; Deep Discounted; Rights Issues; Rights Offering; Restructuring; Insider Purchases / Buying Change of Management / CEO Change; Deteriorating fundamentals; Post-Bankruptcy; Reorganization; Tender Offer; M&A Deals; Secondary Offering; Share Swap; Thrift Conversions; Share Buybacks; Activist; Mergers. All analyzed from a fundamental point of view.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.