Naspers, a global internet group, is moving forward with its open-ended share buyback scheme and plans to remove its complex cross-holding structure with subsidiary Prosus later in 2023.
- The cross-holding structure, which limits the amount of shares a subsidiary can acquire in its parent, is nearing its limit, and it is seen as negative by shareholders.
- Naspers owns a majority stake in Prosus, which encompasses its earnings from investments in Tencent, online classifieds, food delivery, payments and fintech, and education technology.
- In South Africa, Naspers owns internet and e-commerce companies such as Takealot, Mr D Food, Superbalist, Autotrader, Property24, and Media24.
- The proposed transaction, expected to take place in Q3 2023, will align Naspers’ direct shareholding with its economic interest of about 43% in Prosus.
- CEO Bob Van Dijk explained that the transaction will involve issuing a significant number of shares to dilute Prosus out of the Naspers shareholder register while consolidating other shares to maintain a healthy number.
- Naspers reported decreased contribution from its Tencent stake, which declined during the buyback period and faced pressure from COVID-19 lockdown policies in China. Losses across associates also increased.
- Despite the challenges, Prosus approved a dividend increase of approximately €175 million, and Naspers’ dividend will depend on receipts from this. The company’s financial position improved, with gross cash of $15 billion.