MultiChoice Tops JSE with $3 Billion on Debut

Remember when we said Africa’s biggest pay-tv group, MultiChoice will be listing on the Johannesburg Stock Exchange (JSE) in the first half of 2019? Well, it debuted on the JSE on Wednesday with shares opening at 95.50 rand, giving the company a market capitalization of 42 billion rand ($3.03 billion).

E-commerce giant Naspers, who also happen to be MultiChoice’s parent company decided to list them due to pressure in recent years to reduce a discount in its share price versus the value of its stake in Tencent, another one of its subsidiaries. The stock was trading at 105.04 rand as of 0727 GMT. Naspers however, did not raise money from the listing but distributed the 439 million shares to its current shareholders to boost their equity. They distributed on a one-for-one basis for its listed shares and one for five unlisted A class shares.

This listing leaves MultiChoice free to fend for itself in the competitive market with competitors like Netflix, who is already supplying viewers TV content. MultiChoice was founded 30 years ago, it reached about 14 million households in over 50 African countries. It offers paid-TV products and a streaming service called Showmax.

The company said they are yet to penetrate over 25 million households within the continent. In March 2018, the company sold some of its Tencent shares for the first time since its investment 17 years ago. Through a sale valued 2% of Tencent’s worth, it raised $9.8 billion. Since its 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.

MultiChoice CEO Calvo Mawela said “This is a momentous time for our business… This marks the next chapter in our development and growth.”