Naspers of South Africa has launched a deal swap deal with the Dutch -listed investment unit in a move to mitigate the impact of its 29 per cent holding on Tencent in China in local financial markets.
Rising prices on Tencent’s share caused Naspers to once again balloon to nearly a quarter of the Johannesburg bourse. This forced South African investors to sell their shares to avoid the risk of concentration.
In response, Naspers announced a swap deal deal with Prosus, a listed subsidiary of the Dutch owner of the Tencent stake.
Prosus is offering to buy 45 percent of its parent in exchange for its own share, Naspers said Wednesday. The deal will give Prosus a 49.5 per cent economic interest in Naspers and raise free float in what is already Europe’s largest listed internet group to $ 100bn, it added.
Naspers continued to detain Prosus from domicile in South Africa.
Naspers is the largest listed company in Africa due to its holding on Tencent but its sale has sold at a hefty discount on the amount of its stake, bringing it to the Prosus list in 2019.
Prosus sells at a narrow discount on the price of Tencent shares.
Prosus ’acquisition of Naspers shares“ is intended to be a sustainable construction address that addresses the structural issue ”while keeping financial fit on the European list, according to Naspers.
The offer “preserved Naspers as the largest company with South Africa’s dominance in the JSE and its control over Prosus,” said Basil Sgourdos, Naspers ’chief financial officer.