Monday, February 24, 2020
Martin Hennecke

Naspers spinoff soars on debut
Naspers's newly listed internet unit received an enthusiastic early response from investors, soaring on its trading debut to close a valuation discount to its biggest investment, Chinese tech giant Tencent (0700). Prosus, as the new Amsterdam-listed company is known, jumped as much as 32 percent in early trading to value the business at about 125 billion euros (HK$1.08 trillion). The group's 31 percent stake in WeChat creator Tencent is worth about US$131 billion. The investor reaction is an early vindication of the strategy masterminded by Naspers chief executive Officer Bob van Dijk. His plan to carve out Prosus into a new listing in Amsterdam was designed to attract a more global investor base and realize more value, while weakening the group's dominance over the Johannesburg stock exchange. Prosus's classified-ads business is the largest in the world, while the group also sees fast expansion in internet payments, food delivery and online trading in second-hand goods, he said. While the discount to Tencent was all but wiped out, the firm is still trading below the sum of its parts when you add other assets, including shareholdings in Russia's Mail.Ru Group and Delivery Hero of Germany. Van Dijk's next challenge will be to generate higher returns from those investments and prove that Prosus isn't merely a proxy for holding Tencent stock. "Our next step will be to bed down and invest in our core business units," chief financial officer Basil Sgourdos said. Shares in Prosus declined slightly after the early surge by mid-morning to go up 27 percent at 74.41 euros in Amsterdam.. The value as of 11.28 am was 121 billion euros, making it the third-largest publicly traded company in the Netherlands, behind Royal Dutch Shell and Unilever. Its market value rivals that of Europe's biggest tech company, Germany's SAP.
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