Prosus NV and its parent Naspers Ltd. received approval from South African regulators to remove a cross-holding structure in a deal that will let Naspers continue a share buyback program.<\/p>\n
The South African Reserve Bank gave the required approvals for a proposed transaction that will remove the complexity of the cross-holding structure, Naspers said in a statement on Tuesday.<\/p>\n
The ultimate aim of eliminating the structure and buying back stock is to reduce the discount between Naspers\u2019s and Prosus\u2019 overall value and the value of the group\u2019s 26% stake in Chinese Internet giant Tencent Holdings Ltd.<\/p>\n
Naspers was an early investor in Tencent, and as the Chinese company\u2019s value soared, investors have put a disproportionately high value on the stake versus the company that owns it.<\/p>\n
That led to Naspers splitting off Prosus, which contains the Cape Town-based company\u2019s tech holdings and the Tencent stake, in 2019.<\/p>\n
About a year ago, Prosus started to reduce its holdings in Tencent to fund the stock buyback. Prosus currently owns about 26% of Tencent.<\/p>\n
The regulator\u2019s permissions will allow Prosus to be diluted out of its shareholding of Naspers, while Naspers will retain control over Prosus and a 43% direct economic interest in the company, Prosus chief executive officer Bob van Dijk said in an interview.<\/p>\n
The cross-holding between the two businesses was introduced in 2021 and resulted in Prosus holding 49.95% of its parent company.<\/p>\n
\u201cThe open-ended buyback created about $30 billion in value,\u201d to date, Van Dijk said in an interview.<\/p>\n
\u201cHowever, we were going to run into limitations, and by removing the cross holding we will be able to continue with the program.\u201d<\/p>\n
Tencent shares rose more than 3% on the news that the cross-holding will be removed.<\/p>\n
Prosus shares opened 7% higher in Amsterdam, while Naspers was up 9% in Johannesburg.<\/p>\n
\u201cNaspers would have been stuck at max 10% share buyback without this proposed transaction,\u201d said Peter Takaendesa, head of equities at Mergence Investment Managers.<\/p>\n
\u201cWe will have to see if there is nothing in the proposal that will stop shareholders from supporting the transaction.\u201d<\/p>\n
Van Dijk said there will be a vote on the transaction later in the year.<\/p>\n
The South African Reserve Bank gave the required approvals for a proposed transaction that will remove the complexity of the cross-holding structure, Naspers said. <\/p>\n","protected":false},"author":341034,"featured_media":450428,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[19],"tags":[23751,1643,59639,38306,18941],"class_list":["post-497817","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-bob-van-dijk","tag-naspers","tag-prosus","tag-south-african-reserve-bank","tag-tencent"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/497817"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=497817"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/497817\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/450428"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=497817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=497817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=497817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}