South Africa’s Naspers plans to list assets of its video entertainment businesses on the Johannesburg Stock Exchange in the first half of 2019 while it simultaneously unbundles the shares in this business to its shareholders.
After unbundling, the new company will be named MultiChoice Group and will comprise MultiChoice South Africa Holdings, MultiChoice Africa Holdings, MultiChoice Botswana, MultiChoice Namibia, NMS Insurance Services SA, the African division of Showmax, Irdeto Holdings and Irdeto South Africa, along with their subsidiaries or affiliates.
In the last financial year ending March, MultiChoice added 1.5 million subscribers and generated revenue of R47.1 billion ($3.2 billion) and trading profit of R6.1 billion ($410 million). However, it lost 41,000 premium subscribers across its African markets.
According to Naspers CEO Bob Van Dijk, the company will not raise funds through the deal but shareholders will benefit eventually.“Listing MultiChoice Group via an unbundling is expected to unlock value for Naspers shareholders and at the same time create an empowered, top-40 JSE-listed African entertainment company,” he said.
He added that through its PN share schemes, Phuthuma Nathi 1 Investments and Phuthuma Nathi Investments 2, which are among the most successful Broad-based Black Economic Empowerment (BBBEE) schemes in South Africa, MultiChoice Group will still be committed to socio-economic transformation as Naspers will still invest in its e-commerce businesses; Takealot, Mr D Food, PayU and AutoTrader.
The unbundling is expected to create further value for PN shareholders after an additional 5 percent allocation. Meaning that after the transaction in 2019, PN shareholders’ interest in MultiChoice South Africa and its dividend flows would increase by 25 percent.
As at 4:58PM in South Africa, PN1 traded at R112.00, having gained about 26.55 percent. PN2 also rose by 31.76 percent to R112.