Naspers [JSE:NPN] may be moving most of its internet businesses to a new listing in Amsterdam, but the Cape Town-based technology investor is at pains to show it’s not abandoning South Africa.
The creation of the still generically named NewCo Group will hold such crown jewels as Naspers’s 31% stake in Chinese web giant Tencent Holdings - now worth $121bn. Left behind in South Africa will its media assets plus local online ventures Takealot and Property24.
That looks like a bad deal for some local investors, who may feel some of their wealth is being taken to where it could be heavily taxed, according to Naspers Chief Executive Officer Bob Van Dijk. Rather than anger the people who backed the company on its way to becoming a $94bn behemoth, Naspers is giving NewCo a secondary listing in Johannesburg and arranging a way to make the spin out more tax-efficient.
"We did not want to force or inconvenience some of our other shareholders that would have to pay immediate capital-gains tax with the new listing," the CEO said by phone. "We decided to do a cash issuance that will give the investors the options to take Naspers or Newco shares."
The Johannesburg secondary listing is another clear concession to those that fear the departure of South Africa’s biggest corporate success story - and cash cow for investors. The move will allow local institutions to work around restrictions on owning foreign shares, Van Dijk said.
"They would be able to hold NewCo as a domestic stock," he said.
The reality is that some sort of Naspers breakup has become unavoidable. The company is so big that it makes up almost 25% of Johannesburg’s All-Share Index, compared with 5% in 2013. That’s forced some investors to sell the stock to keep within investment rules regarding exposure to a single company. In short: Naspers needs a second home.
Naspers will be a 73% majority shareholder in NewCo and will honor last year’s pledge to invest R3.2 bn in existing South African businesses, the company said in a statement on Wednesday. The firm will also invest in the local tech startup sector, it added.
* Fin24 is part of 24.com, a division of Media24, which is a subsidiary of Naspers.