Naspers has been given the green light by its shareholders to proceed with the listing of newly created entity Prosus.
Prosus will hold assets, including a 31 percent stake in Chinese internet giant Tencent Holdings, worth about $125 billion (R1.9 trillion).
Naspers needed at least 75 percent of the votes at the extraordinary general meeting held on Friday to implement the proposal, but it garnered 95.51 percent of the votes.
The proposed listing of its new global consumer internet group, Prosus, on the Euronext Amsterdam Stock Exchange was put on hold in June after Naspers found an administrative error by an external service provider.
In addition to listing in Amsterdam, Prosus will have a secondary, inward listing on the JSE.
Naspers expects to own no less than 73 percent of Prosus with a free float of up to 27 percent created through a capitalisation issue of Prosus shares to Naspers shareholders and Naspers will retain its primary listing on the JSE.
Naspers chief executive Bob van Dijk said the group was on track to list its international internet assets as Prosus on September 11. “We believe Prosus will present a new and attractive opportunity for global tech investors to access our unique portfolio of internet businesses, providing a strong foundation for our future growth plans. The listing is also designed to reduce our weighting on the JSE, which we believe will maximise shareholder value over time,” Van Dijk said.
Peter Takaendesa, a portfolio manager at Mergence Investment Managers, said the listing of Prosus had a number of potential benefits, but would also have tax implications for individual investors.
“Unfortunately, individual investors - those not part of pension funds - will have to pay capital gains tax now if they receive Prosus shares on listing. However, there is an option to ask for more Naspers shares instead of receiving Prosus shares and that election of Naspers shares will not result in capital gains now if the investor does not sell their Naspers shares,” Takaendesa said.
He said the potential benefits of listing Prosus included attracting a new group of Naspers buyers, as developed-markets investors would now have the shares listed in Europe, and the concentration risk caused by Naspers’ size on the JSE would be reduced, although not eliminated.
“South African investors have largely been forced sellers, as Naspers’ size on the JSE continues to grow, because most pension funds are not allowed to own more than 20 percent to 25 percent of the portfolio in one company. This was the reason for the creation of capped indices by the JSE, but the local selling pressure on Naspers was not resolved by those new indices. Although the listing of Prosus will also not fully resolve the issue, Naspers shareholders will be in a better position compared to leaving things as they have been,” Takaendesa said.
However, he said Naspers would remain the majority shareholder in Prosus, and it would remain the largest company with a primary listing in South Africa, so the listing was not a loss to the country at this stage.
“The Naspers board is trying to find ways to reduce the discount that Naspers trades at compared to the value of its underlying investments, such as Tencent. Listing MultiChoice and Prosus is likely step one of many to come,” he said.
Naspers closed 0.32 percent lower on Friday at R3419.