prosus tencent discount

Would you like to comment on this article or view other readers' comments? Sell. Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January. Simple. In research on Smart Karma on January 22, Artherton points out that direct investment in Tencent since the Prosus listing would have outperformed buying either Naspers or Prosus. These categories enjoyed booming demand from consumers ordered to stay at home across the world in the global fight to contain the Covid-19 pandemic, triggering chase from other deep-pocketed companies forced to look for new revenue streams to make up for the sales destroyed by lockdowns. No matter how fast the Prosus team runs to chase down the discount, the Tencent team will be running considerably faster driving it up.Being the Internet, there might of course be some totally unseen and currently unseeable scenario that could p The spin-out from Naspers was intended to reduce the discount at which the company traded to its Tencent stake. Indeed, it trades at a $59 billion discount to the … But the Prosus control structure makes it immune to outside influence on strategy and puts off a universe of active investors who want to have a say on its behaviour. EDITORIAL: Tencent discount needs Naspers to give up control of Prosus CEO Bob van Dijk might have to wrestle with the valuation conundrum a while longer 10 November 2020 - 05:08 There was nothing to complain about. The global investment group is the largest consumer internet company in Europe, and among the largest technology investors in the world, operating across a variety of platforms and geographies. But the discount to the overall Naspers portfolio has become even wider. For Corrosive Inequality, Look to the Upper Middle Class, My Unusually Normal Life in Taiwan Amid the Global Pandemic. Naspers, Prosus & Tencent: Twin discounts . But he said that even if Prosus’s other assets were valued at zero, you would still be buying Tencent at a discount of about 20pc. Discount. Other business … If the Unemployment Insurance Fund isn't used to benefit workers now it might have to fund more jobless workers in future, Rand weakened in early trade as investors sought the safety of US treasuries, The state is abrogating its duty by not enforcing proven safety protocols to prevent Covid-19, South Africans should learn not to take our hard-won democracy for granted, Natural gas burns cleaner than other fossil fuels but it is a fossil fuel nonetheless and the world is drawing away from it, EDITORIAL: Tencent discount needs Naspers to give up control of Prosus, CEO Bob van Dijk might have to wrestle with the valuation conundrum a while longer, He walked away from the deal earlier in 2020 but to be back in the M&A scene a few months later when he put in a $9bn cash offer for. Even before the pandemic hastened the trend towards online shopping, food delivery and other technology platforms, and forced companies across the world to reckon with the new reality, Prosus investors were reluctant to give Van Dijk the thumbs up when he tried to buy a large UK food delivery business, Just Eat, for $8bn. For most companies, that should be enough to make any of their problems go away but for Prosus it is a tiny, albeit laudable, step in breaking the shackles of being regarded as nothing more than a proxy to Tencent. Prosus N.V., or Prosus, is the international internet assets division of Naspers. Prosus NV plans to buy back a combined $5 billion of shares in itself and its South African parent Naspers Ltd. in a move designed to boost shareholder value and narrow a discount between the e-commerce giant and its stake in Tencent Holdings Ltd. The Naspers/Prosus double-discount structure, coupled with excessive executive remuneration in the view of many market analysts, is a major headache that will be difficult to rectify. Now, Tencent’s market cap is $660bn in round numbers. For one thing, shareholders should take comfort in the explicit recognition by Van Dijk that the global hunt for consumer internet takeover targets has pushed prices to levels that would be difficult to justify. DURBAN - PROSUS shares rose more than 5 percent on the JSE on Friday after the Dutch technology giant said it intended to buy back up to $5 billion … The focus on Prosus and Naspers has intensified as the companies deal with a valuation gap to Tencent. Prosus owns a 30.9% stake in Asia’s online software and payments giant Tencent worth nearly 200 billion euros at Thursday’s closing price. Prosus shares closed 2.97 percent up at R1 626.93, while Naspers shares closed 3.98 percent higher at R3 152.32. The company is valued substantially less than its stake in Tencent alone. The Dutch firm still became Europe’s largest tech company by market capitalization this week after SAP SE shares declined following a profit warning. (Bloomberg Opinion) -- Prosus NV, which became Europe’s largest technology company this week, has always been something of a Gordian knot for investors.The Amsterdam-based company derives the entirety of its 141 billion-euro ($165 billion) market capitalization from its 31% stake in Tencent Holdings Ltd., the Chinese e-commerce giant. That’s the Gordian knot which van Dijk has the unenviable task of trying to unravel. It … Prosus' share price. How much tax will be payable on the sale of a house held in trust? Having failed to clinch before valuations went through the roof and still grappling with the long-standing valuation mismatch,  he was left with little choice than to hand the money to shareholders. Currently, we estimate the Naspers discount to NAV to be c. 45.2% and the Prosus discount to NAV c. 30.2%. All rights reserved. And Naspers (NPSNY) still controls Prosus, by the way, with a 74% stake, so Naspers shares represent a discount on top of a discount — 74% of Prosus should be worth $99 billion, yet Naspers in South Africa currently has a market cap of $73 billion, so that’s a 26% discount on top of a 20% discount. Naspers holds 72% of Prosus and Prosus owns 31% of Tencent. Naspers wound up selling 22 million Prosus shares, which amounted to 1.4% of Prosus' free-float, bringing Naspers' share of the company down from roughly 73.8% to 72.5%. The buyback ought to provide some reassurance to investors that van Dijk is wary about overspending on deals, though he can always sell more Tencent stock to fund massive acquisitions when a lockup expires next year. In this write-up, I will dive deep into the company’s high-risk high-reward investments, which is one of the major reasons why this discount is occurring. He previously covered Apple and other technology companies for Bloomberg News in San Francisco. South African e-commerce group Naspers is listing its international internet assets, including its 31% stake in China's Tencent <0700.HK>, in Amsterdam on Wednesday under the name of Prosus. Van Dijk isn’t so much cutting the Gordian knot as learning to live with it. An announcement in recent days that Prosus, which houses the company's international assets including the investment in Tencent, will shower investors with more than R82bn in cash through the repurchase of its own shares, is the latest attempt to tackle the valuation shortfall, which stood at $59bn. If Prosus is included in the Eurostoxx 50 index in September as expected, it’s hoped the investment inflows will drive the price up and help narrow the discount between Prosus and Tencent… And finance head Basil Sgourdos appears to acknowledge that there may be further actions to come: “We will also continue working on a series of initiatives to further address the consolidated discount to net asset value.”. eBay’s classifieds business, but the US company chose another bidder. But equally, why invest in Prosus shares to get exposure to Tencent when you could just invest directly in Tencent itself? The EU’s treaty with the U.K. isn’t a “win,” but it avoids a messy divorce and gives the bloc leverage for the future. “The idea of narrowing the discount to NAV has spectacularly failed,” he wrote. WATCH: Will bitcoin continue its upward trend in 2021? Prosus owns a 30.9% stake in Asia’s online software and payments giant Tencent worth nearly 200 billion euros at Thursday’s closing price. Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. Van Dijk took over a consumer internet powerhouse, a top-10 global technology investor alongside Softbank, Facebook and Google. Prosus’s own value was just 135 billion euros as of Thursday’s close, including other investments in online classified, payment and food delivery businesses. At the end of the day, having a smaller discount to NAV would be a good thing for existing shareholders,” Treherne said. In the days immediately after the Amsterdam listing in September 2019, the ploy proved successful, as Prosus traded closer to the value of its holding in the Chinese firm. Prosus is a global consumer internet group and one of the largest technology investors in the world Go to content. The final sale was made at 67.50 euros, a discount to where shares were trading at that time, but a bit higher than Prosus' current … Naspers has long traded at a discount to the value of its Tencent stake alone. We build leading companies that empower people and enrich communities See all our companies. Tencent is at the very centre of the global metaverse; Prosus is on the edge trying to pick up scraps. © 2020 Arena Holdings. Source: Bloomberg. South African e-commerce group Naspers is listing its international internet assets, including its 31% stake in China's Tencent <0700.HK>, in Amsterdam on Wednesday under the name of Prosus. It’s a good thing. Tencent’s share has jumped almost 57% so far in 2020, driven by investor interest in tech stocks amid the Covid-19 pandemic. Prosus N.V., or Prosus, is the international internet assets division of Naspers. Buy. To close the gap, Naspers spun off 27.5% of these international investments into a separate company called Prosus … Please read our Comment Policy before commenting. Plus they’ll benefit from the reduced share count through greater exposure to the Chinese giant. In what is a seller’s market, shareholders would have rightly frowned upon an attempt to deploy a R120bn mergers and acquisition budget Prosus flaunted in April. Prosus hopes to close discount to NAV with $5bn share buyback. In the days immediately after the Amsterdam listing in … As can be seen from Figure 1 , these discounts to NAV have gone pretty much one way since Prosus listed on 11 September 2019. Prosus shares closed 2.97 percent up at R1 626.93, while Naspers shares closed 3.98 percent higher at R3 152.32. 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Source: Sharenet Naspers subsidiary and the largest consumer internet company in Europe, Prosus continued to benefit from its holding in the fast-growing Chinese behemoth Tencent, while its own food-delivery businesses were bolstered by the … And that might be what shareholders need. It's not only billionaires that are the problem. Prosus's discount to net asset value is 40%. Why would the European tech company invest in anything but Tencent? An investor needs to trust that Prosus’ high-risk, high-reward investments and the Tencent … But he said that even if Prosus’s other assets were valued at zero, you would still be buying Tencent at a discount of about 20pc. One of our largest aggregate portfolio positions is in the related companies of Naspers (a South African holding company), its subsidiary Prosus (a Dutch media conglomerate focused on the internet in emerging markets), and Prosus’s biggest investment, Tencent (a Chinese internet giant). Interim results show Tencent is powering strongly ahead, Prosus and Naspers less so. In the days immediately after the Amsterdam listing in September 2019, the ploy proved successful, as Prosus traded closer to the value of its holding in the Chinese firm. That was all down to Tencent’s rapid growth, which helped Naspers grind out double-digit profits and deliver an uninterrupted flow of dividends. Have a confidential tip for our reporters? There should be a discount to listed net asset value (NAV) of about 25% for Prosus and about a further 20% for Naspers, says Malan. Tencent: the … Tencent Investor Prosus Launches $5 Billion Buyback in Bid to Close Value Gap Naspers, Africa’s most valuable listed company and Prosus parent, has struggled to … Prosus said on Friday it would purchase up to R82 billion in its own and parent Naspers shares, as part of efforts to narrow a discount between its share price and underlying assets. Tencent Investor Prosus Launches $5 Billion Buyback in Bid to Close Value Gap Naspers, Africa’s most valuable listed company and Prosus parent, has struggled to … Among challenges facing Prosus Chief Executive Officer Bob van Dijk is a persistent gap in the company’s valuation and its crown jewel: A 31% stake in Chinese giant Tencent Holdings. The Amsterdam-based company derives the entirety of its 141 billion-euro ($165 billion) market capitalization from its 31% stake in Tencent Holdings Ltd., the Chinese e-commerce giant. Tencent’s share has jumped almost 57% so far in 2020, driven by investor interest in tech stocks amid the Covid-19 pandemic. Read more at the SA government's online coronavirus portal or use the 24-hour public hotline: 0800 029 999. Therefore, Naspers holds an effective 22% of Tencent (72% x 31%). Macron and Merkel Get the Least Bad Brexit Option, California Goes It Alone in the War on Covid, Refugees Shouldn't Monopolize the Immigration Debate, How Biden’s Iran Policy Can Have a Chance to Succeed. WATCH: Is there a third way to extricate SA’s economy? Naspers owns 900,000 unlisted A-class shares, which carry 1,000 times more votes than ordinary shares, that kick in as soon as its Prosus stake falls to 50%. Use of this site constitutes acceptance of our Terms & Conditions and Privacy Policy. The Dutchman has been preoccupied for much of the past five years since his appointment unlocking value trapped in Naspers’ share price, which continues to trade at a hefty discount to its 31% stake in its Chinese money-spinner, Tencent Holdings. 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The Naspers/Prosus double-discount structure, coupled with excessive executive remuneration in the view of many market analysts, is a major headache that will be difficult to rectify. The company is valued substantially less than its stake in Tencent alone. Over the same period of time, Naspers has risen 32.7% and Prosus … As of February 10, the Naspers discount to NAV was 42.6%, at the upper end of its … The spin-out from Naspers was intended to reduce the discount at which the company traded to its Tencent stake. Business Day TV caught up with Ziyad Joosub from Nedbank CIB for his thoughts on this move. “TulAmmo 223 REM 55 GR FMJ STEEL CASE 500 ROUNDS, 7 in Stock” 62¢/rd: 1000 for $620.00: TulAmmo .223 Remington Bulk Tencent: the … Even though Takeaway.com NV ultimately bought Just Eat, Prosus continues to trade at a discount to the value of its assets. Prosus NV plans to buy back a combined $5 billion of shares in itself and its South African parent Naspers Ltd. in a move designed to boost shareholder value and narrow a discount between the e-commerce giant and its stake in Tencent Holdings Ltd. Talk about nice-to-have corporate headaches, Bob van Dijk, the boss of Prosus, a unit of Naspers’ global internet behemoth, will tell you all about it. Both Van Dijk and Sgourdos referred to the problematic discount of the Naspers and Prosus … This implies that Naspers has an effective $145bn in value just in Tencent (22% x $660bn). Photographer: Deng Qingle/China News Service. But just weeks after the listing, Prosus made a £4.9-billion bid to acquire the British food delivery platform Just Eat. This begs the question: Why would Prosus Chief Executive Officer Bob van Dijk put the company’s money in anything else? We build leading companies that empower people and enrich communities See all our companies. Prosus is a venture capitalist, making high-risk high-reward investments. Prosus is a global consumer internet group and one of the largest technology investors in the world Go to content. Other business … That could help narrow the discount. The global investment group is the largest consumer internet company in Europe, and among the largest technology investors in the world, operating across a variety of platforms and geographies. Buy Prosus for exposure to Tencent and high-risk, high-reward investments, but investors should not buy the stock hoping the discount contracts in the coming years. It was when the stake started eclipsing Naspers’ market capitalisation that investors started asking uncomfortable questions about Van Dijk’s bonuses and heaped pressure on him to take steps to unlock value. In an attempt to narrow the discount and unlock value for shareholders, Prosus plans to launch a share buy back programme worth R81bn. At the end of the day, having a smaller discount to NAV would be a good thing for existing shareholders,” Treherne said. Prosus, he argues, is simply Naspers by another name. By Loni Prinsloo (Bloomberg) – Prosus NV plans to buy back a combined $5 billion of shares in the global e-commerce giant and its South African parent Naspers Ltd., a move designed to boost shareholder value and narrow a discount between the company and its stake in Tencent … To contact the author of this story:Alex Webb at [email protected], To contact the editor responsible for this story:Nicole Torres at [email protected] The discount between Prosus and its Tencent stake has expanded this year. Following a c. 24% rally in the Tencent share price (Naspers owns a 31% stake of the Hong Kong-listed tech Group, which accounts for >80% of Naspers’ net asset value [NAV)]) from c. 4 December 2019 to Monday’s (13 January) close, we highlight what has happened to the Naspers and Prosus discount to NAV below. Given that Naspers is worth roughly 30% less than the value of its 73% stake in Prosus, Van Dijk’s series of actions, including separately listing Prosus in Europe, have failed to narrow the discount. Royal A One Brings Discount Car Rental Deals for Travelers Throughout Washington 1 MINIMALLY INVASIVE PHYSICIANS RECOGNIZED AS “TOP DOCS” BY WASHINGTONIAN MAGAZINE 2016 2017 2018 2019 By dint of owning 31% of Tencent, worth about $208bn, as well as other investments made since, Prosus is the EU’s fourth-most-valuable firm. It’s a sensible use of the company’s $8.7 billion cash pile, most of which derives from the sale of some of its Tencent stake two years ago. (Bloomberg) -- Prosus NV plans to buy back a combined $5 billion of shares in itself and its South African parent Naspers Ltd. in a move designed to boost shareholder value and narrow a discount between the e-commerce giant and its stake in Tencent Holdings Ltd.The group will aim to pick up $1.37 billion of its own stock and $3.63 billion of Naspers, Amsterdam-based Prosus said in a … He has mapped out a sound plan to build Prosus on three pillars: online payments, food delivery and classifieds. In an attempt to narrow the discount and unlock value for shareholders, Prosus plans to launch a share buy back programme worth R81bn. Tencent stock has soared 57% increase this year, easily making it the best performer in the firm’s portfolio. This was also a problem for Naspers Ltd., the South African company that spun off Prosus in 2019 in part to try and reduce the discount. 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