- The Naspers-Prosus share-swap transaction - aimed at reducing Naspers weighting on the JSE - is now complete.
- Prosus holds 49% of Naspers ordinary shares and Naspers now owns 56.92% of Prosus ordinary shares.
- Despite concerns raised by analysts of the complicated cross-holding structure that would result, the offer was oversubscribed.
A share swap transaction aimed at reducing Naspers' weighting on the JSE's SWIX index is now complete.
In a notice to shareholders issued on Monday, Naspers indicated that Prosus now holds 49% of Naspers ordinary shares. Naspers is still a majority shareholder of Prosus, owning 56.92% of Prosus ordinary shares.
Both shares have been trading lower. At around noon, Naspers was trading 3.14% lower at R2 719 and Prosus was down 2.44% at about R1 277. Over the past year Naspers share price has lost about 10% of its value and Prosus has lost 22%.
According to investment analyst Wayne McCurrie, the offer was oversubscribed. This was despite some analysts previously raising concerns of the complex cross-holding structure that would result from the transaction. However, the transaction got the green light from Prosus shareholders in July, Fin24 previously reported.
Naspers and prosus. 64% of applications are awarded . So over subscription. Both shares down 4%.— Wayne McCurrie (@WayneMcCurrie) August 16, 2021
Wilhelm Hertzog, founder and portfolio manager at Rozendal Partners, said he was surprised at the "strong" uptake of the offer. "I thought the acceptance level would be much closer to the minimum level, given the negative sentiments expressed about the transaction in the market," he said.
In a separate media statement, Naspers and Prosus CEO Bob van Dijk explained the transaction increases the size of Prosus' free float and more than doubles its ownership of the group's global consumer internet portfolio. Prosus owns international internet assets such as Chinese tech company Tencent, classifieds business OLX and Indian food-delivery platform Swiggy.
"It will also help to rebalance the oversized weight of Naspers on the JSE, while preserving its position as the largest South Africa-domiciled company on the exchange, as well as its control of Prosus," Van Dijk said of the transaction.
Both Naspers and Prosus had been trading at deep discounts to their 28% stake in Tencent. The transaction is also meant to address this discount gap.
Naspers previously tried to address the discount gap by listing Prosus on Amsterdam Euronext.
*Fin24 is part of Media24, owned by Naspers.