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South African broad-based multinational internet and media giant, Naspers has decided to list Multichoice its pay video business on the Johannesburg Stock Exchange next year while unbundling the shares to its existing shareholders.

The standalone unit will be called Multichoice Group and will include MultiChoice South Africa Holdings, MultiChoice Africa Holdings, MultiChoice Botswana, MultiChoice Namibia, NMS Insurance Services SA Ltd, Showmax and Irdeto Holdings.

Multichoice owns popular paytv services DSTV and GoTV.

The company made this known in a notice on its website, and also held a conference call where it provided further details on the transaction.

Naspers CEO, Bob Van Djik also disclosed the company would consider listing other units.

“We are also looking at some primary listings for some of our other businesses to further unlock value.”

What does unbundling mean?

Rather than sell the unit, the company will give Multichoice shares to its existing shareholders. Tier one bank UBA Plc, had few years ago taken a similar step when it listed United capital plc and Africa Prudential plc on the Nigerian Stock Exchange (NSE). UBA shareholders were given shares in the new entities.

Why is the company doing this?

The move would enable the firm boost its valuation as some institutional firms had refused to hold the stock because of its weighting on the Johannesburg Stock Exchange.

The firm had in the past indicated it’s intentions to sell off the pay video arm and face its more lucrative internet businesses.

While Multichoice added 1.5 million subscribers in its last financial year, it contributes less than 10% of group revenue and is growing at a much smaller pace compared to other segments like Mail.ru and Tencents where Naspers has a significant stake.

Deal book 300 x 250

Implications of the offer

The company would be in a position to take decisions of its own and could decide to exit markets it find unprofitable.

Naspers was founded in 1915, and is one of the largest technology investors in the world, with operations in over 100 countries and a staff strength of over 23,000.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com


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