Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Economy & Forex

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Naspers spin-off Prosus surges 25% on Amsterdam market debut

share with twitter share with LinkedIn share with facebook
09/11/2019 | 08:14am EDT
A logo of Prosus is diplayed at Amsterdam's stock exchange building as Prosus begins trading on the Euronext stock exchange in Amsterdam

AMSTERDAM (Reuters) - Shares in Prosus, a spin-off from Naspers that includes the e-commerce group's 31% stake in Chinese tech giant Tencent, surged more than 25% on their stock market debut in Amsterdam on Wednesday, creating one of Europe's largest internet companies.

Prosus comprises South African group Naspers' global empire of consumer internet assets, including the stake in Tencent, the world's biggest video game company and home to China's hugely popular WeChat social media platform.

"We've become so big that further growth of our company on the JSE (Johannesburg Stock Exchange) would be difficult," Naspers CEO Bob van Dijk told reporters after the listing, which values Prosus at more than $100 billion.

"The idea with today's listing is emphatically that we find a new generation of investors here, on the Euronext, for our further growth," he added, referring to the Amsterdam exchange.

Euronext had given an indicative price of 58.70 euros per share for Prosus, derived from Naspers' value in Johannesburg.

Prosus shares jumped to 76 euros on opening and traded at 74.52 euros at 1125 GMT, a 27% increase, on volume of 4 million shares. With around 1.6 billion shares registered, that implies a market capitalisation for Prosus of around 119 billion euros ($131 billion), close to the market value of its Tencent stake.

Shares in Naspers, which is retaining a controlling 75% stake in Prosus, fell a corresponding 31% in Johannesburg, acting similar to a share that has gone ex-dividend.

The spin-off marks the end of an era for Naspers as it looks to move beyond the legacy of former CEO Koos Bekker's prescient investment of just $34 million in Tencent when it was a startup in 2001, one of the most lucrative bets in corporate history.

The stake in Tencent is now worth $130 billion and has buttressed Naspers' rapid growth towards becoming Africa's most valuable listed company.

Prosus becomes the third-largest stock on the Amsterdam exchange after Shell and Unilever, and Europe's No.2 tech firm after Germany's SAP .

European players are still, however, dwarfed by the likes of Facebook and Amazon in the United States.

The Tencent stake has been worth more than Naspers itself for years, and dominated the $103 billion group's finances. One motivation for spinning off Prosus was to narrow that value gap.

"Essentially you know you've been buying into Naspers and getting the 31% stake in Tencent, and then the rest of the business you're getting for free," said Morningstar analyst Johann Scholtz.

"Part of the reason for that discount has really been the way that Naspers has become ever more significant to the South African all share index."

Naspers had accounted for more than 20% of the index.

"Obviously for South African fund managers that creates a massive concentration risk, especially those that manage pension funds," he said.

Graphic: https://fingfx.thomsonreuters.com/gfx/mkt/12/5720/5670/Prosus.png


Prosus also has stakes in fast-growing food delivery, social media and payments companies in China, India, Brazil and Russia.

In the food and delivery sector, it owns stakes in Delivery Hero, Takeaway.com, Latin America's iFood, and India's Swiggy.

For the fiscal year ended in March 2019, Prosus reported a 15% rise in revenue to $2.65 billion, and its operating loss narrowed to $418 million from $615 million a year earlier.

Prosus accounts for its Tencent stake as an "equity accounted investment", which added $3.41 billion to full-year pretax profit.

Prosus' net profit was $4.25 billion, thanks to a $1.6 billion windfall on its sale of a 10% stake in Flipkart to Walmart.

Jasper Jansen, an analyst at the Dutch shareholders' rights group VEB, welcomed the listing.

"We love the fresh blood - finally there's a real company listing here that’s active in the new economy," he said.

However, he criticized Naspers' decision to maintain a two-class share structure which gives its biggest shareholders extra voting rights in some circumstances.

Van Dijk responded that the company did not expect to exercise extraordinary voting rights - which would become active if Naspers' stake in Prosus fell below 50% - in the foreseeable future.

(Reporting by Toby Sterling; Editing by Susan Fenton and Mark Potter)

By Toby Sterling

Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM, INC. -0.92% 3144.88 Delayed Quote.71.77%
ASML HOLDING N.V. 1.10% 318.25 Delayed Quote.19.38%
DELIVERY HERO SE 1.81% 99.08 Delayed Quote.37.93%
DOW JONES AFRICA TITANS 50 INDEX 0.80% 471.74 Delayed Quote.-12.82%
DOW JONES SOUTH AFRICA(ZAR) 0.00% 1633.12 Delayed Quote.-9.74%
EURO / BRAZILIAN REAL (EUR/BRL) 0.07% 6.617 Delayed Quote.43.33%
EURO / BRITISH POUND (EUR/GBP) 0.62% 0.9126 Delayed Quote.7.80%
FACEBOOK 1.94% 261.79 Delayed Quote.25.13%
JUST EAT TAKEAWAY.COM N.V. 0.48% 95.96 Delayed Quote.16.18%
JUST GROUP PLC -1.63% 43.4 Delayed Quote.-44.15%
MORNINGSTAR, INC. 0.44% 159.3 Delayed Quote.4.82%
NASPERS LIMITED -1.18% 2960.47 End-of-day quote.29.23%
PROSUS N.V. -0.97% 77.28 Delayed Quote.17.09%
RISE, INC. 3.85% 27 End-of-day quote.-10.00%
S&P AFRICA 40 INDEX 0.93% 156.81 Delayed Quote.-10.08%
SAP SE -0.37% 134.16 Delayed Quote.11.92%
TENCENT HOLDINGS LIMITED -0.10% 505.5 End-of-day quote.34.58%
THE GLOBAL LTD. -7.21% 206 End-of-day quote.-56.26%
UNILEVER N.V. -0.92% 51.7 Delayed Quote.1.85%
UNILEVER PLC -0.12% 4805 Delayed Quote.10.59%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.38% 78.9188 Delayed Quote.25.92%
WALMART INC. -0.08% 137.14 Delayed Quote.15.49%
WILL GROUP, INC. 3.19% 874 End-of-day quote.-30.19%
WORLD CO., LTD. 0.48% 1475 End-of-day quote.-45.19%
share with twitter share with LinkedIn share with facebook
Latest news "Economy & Forex"
05:59pCFTC U S COMMODITY FUTURES TRADING COMMISSION : Orders New Jersey Firm to Pay $300,000 for Supervision Violations
05:48pItaly to set 2020 GDP target at -9%, deficit/GDP at 10.8% - Treasury
05:40pWall St goes quiet ahead of presidential debate
05:40pDIAMCOR MINING : Issues Bi-Weekly MCTO Default Status Report
05:32pUtilities Flat On Defensive Bias -- Utilities Roundup
05:31pIrish economic downturn likely to be less severe than earlier forecast - minister
05:30pCommunications Services Down Amid Retreat From Cyclical Sectors -- Communications Services Roundup
05:28pTech Down In Volatile Trade Ahead Of New Stock Launches -- Tech Roundup
05:27pIndigenous activists occupy Petroperu pipeline facilities over healthcare demands
05:25pNATIONAL FOOD SAFETY MONTH WEEK 5 : COVID-19 procedures to follow
Latest news "Economy & Forex"