NASPERS had put one of SA’s biggest internet service providers, MWEB, up for auction, and a deal might be concluded within nine months, MWEB CEO Rudi Jansen said yesterday.
Naspers’s share price rose 2,53% to R181,99 on the JSE yesterday, in contrast to the all share index, which was down 0,3% on the day. MWEB is being sold as it does not fit in with Naspers strategy.
Khulekani Dlamini, media analyst for Renaissance Specialist Fund Management, said the market liked the sale news as it meant a possible realisation of value for Naspers shareholders. He said MWEB had turnover of nearly R1bn a year, and the sale was unlikely to affect Naspers prospects much.
Jansen said transition to a new majority shareholder was “always difficult”, but a shareholder with a telecoms network that could also help drive MWEB’s existing businesses in 26 other African countries would bring significant new opportunities.
Potential bidders had been identified. “We’ve started contacting them. There’s been lots of interest.”
The aim was to sell MWEB on a “tight schedule”, possibly in three to nine months, depending on Competition Board approval, Jansen said.
The announcement followed several approaches for MWEB’s sale, Naspers said.
Jansen said MWEB was making profits and had more than 320000 dial-up and broadband customers in the home and business market, 5000 corporate customers in SA and 24000 corporate customers in Africa. The market share in SA was more than 25%.
It was on the verge of investing in a wireless digital broadband network roll-out to exploit its market leadership position in the rapidly growing broadband market. “This strategy, focusing on connectivity, diverges from Naspers’s core focus of online content platforms, communities and commerce,” Naspers said.
The group’s core focus is now on online content, communities and commerce. This includes investments in Tradus, the leading e-commerce platform in eastern Europe, Tencent in China, Mail.ru in Russia and Gadu-Gadu in Poland. Ibibo in India, Sanook in Thailand and 24.com and Mxit in SA continue to grow their communities.
Arthur Goldstuck, MD of technology research firm World Wide Worx, said the announcement surprised him because of the substantial funds Naspers invested in MWEB, particularly in earlier years when MWEB was struggling.
MWEB, Naspers’s only internet service provider subsidiary, was on the verge of becoming an infrastructure player so it was possible Naspers wished to sell it because of the future investment required to build a broadband network. Naspers had other subsidiaries that also did not exactly fit into its strategy, Goldstuck said.
He speculated that Altech might be a potential buyer of MWEB as Altech was planning to obtain a WiMax digital broadband operating licence, and it did not have the internet services legacy that MWEB had, which would be required for a successful WiMax network roll-out.
MWEB Africa claims to be a leader on the African continent, with capabilities in rolling out new technologies such as WiMax and VSAT.