Faced with calls to break up the eCommerce and Pay TV company and sell its stake in Tecent, the chairman of South Africa’s Naspers said that idea doesn’t take into account the long term.
According to a report in Reuters, Naspers has a 33 percent stake Tencent, the Chinese company that controls the popular WeChat messaging app and owes much of its valuation to that. The report noted Naspers’ Tencent stake is worth $132 billion, or 32 percent more than Naspers. The disconnect with the valuation has prompted some to urge Naspers to sell the stake to boost its valuation.
“We started getting that advice from the day Tencent listed in 2004,” Chairman Koos Bekker said at the company’s shareholder meeting in Cape Town, according to a report by Reuters. “Fact is, each time our board evaluated Tencent, we concluded at that moment it’s still the best use for our money. And today we see no reason yet to change.” The chairman also brushed off calls to split the company so that investors can properly determine the value of the pay-TV business, which is believed to be worth as much as 100 billion rand, noted the report. “If one broke up the company, you could instantly get more for the constituents,” he said, reported Reuters. “But there is strength in being one large group rather than a series of small outfits. This theoretical problem of a so-called discount need not bother the long-term investor.”
The comments on the part of the chairman of Naspers come as the company is, according to Bloomberg, reportedly mulling selling Allegro, an online marketplace and eBay-like competitor based in Poland. As one of the most highly used eCommerce sites in Eastern Europe, with 14 million monthly users, Naspers could fetch a fair price in a win-win situation. The move comes a few short months after Naspers spokeswoman Meloy Horn responded to a Reuters report to an imminent sale of the company’s Allegro property with an emphatic no.
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