Africa’s largest media group; Naspers is finally listing its satellite television subsidiary MultiChoice, the company announced. Naspers is one of Tencent’s biggest shareholders.
It says it plans to list the digital television company on the Johannesburg Stock Exchange (JSE) by the first half of 2019 pending regulatory approvals.
With this, the company will now be known as Multichoice Group, which includes MultiChoice South Africa, Multichoice Africa, Showmax Africa, and Irdeto as Naspers retains its primary listing on the JSE.
The listing comes in a bid to reduce a steep discount in Naspers’ share price versus the value of its stake in Tencent. In March, the company sold some of its Tencent shares for the first time since its investment 17 years ago. Through a sale worth 2% of the Chinese technology giant, it raised $9.8 billion.
Multichoice’s DSTV platform is a digital broadcasting pioneer and the biggest TV operation in Africa. It started operations in 1996 and now has services in at least 50 countries.
Bob van Dijk, the group’s Chief Executive said that the listing will unlock value for Naspers shareholders. “This marks a significant step for the Naspers group as we continue our evolution into a global consumer Internet company,” Bob said.
Since it’s establishment 100 years ago, South Africa’s Naspers transformed from a newspaper publisher into a $94 billion media player – a valuation it owes to its one-third stake in Tencent.
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Despite owing other assets such as Pay-Tv unit and Multichoice, the Tencent stake is worth about 65% more than Naspers, prompting some investors to question the anomaly.
Multichoice contributes about 18% of Naspers’ total sales of $20.1 billion, reaching over 13.5 million households in Africa and generating about $403 million in annual trading profit.
Multichoice’s DSTV service has enjoyed a de-facto monopoly, holding a special appeal for sports and entertainment fans. However, its success is hinged on the affordability of subscription cost, which consequently led to diversified package offerings for users.
Aside from Multichoice and its stake in Tencent, Naspers also runs an e-commerce unit housing platforms like OLX, India and Brazil’s largest classified ads site, and U.S.-based mobile classified app, Letgo.
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