MultiChoice hit a market capitalisation of 42 billion rands ($3.03 billion) after debuting on the Johannesburg Stock Exchange (JSE) of South Africa on Wednesday with shares opening at 95.50 rands.
But according to Reuters, the Naspers-owned company didn’t raise any money from the listing of the company’s 439 million shares instead it was distributed to current Naspers shareholders on a one-for-one basis for its listed shares and one for five unlisted A class shares.
“This is a momentous time for our business… This marks the next chapter in our development and growth,” MultiChoice Chief Executive Office Calvo Mawela said.
So why did Naspers list MultiChoice
Naspers has been under pressure to list MultiChoice on the Johannesburg Stock Exchange in order to find ways to narrow a valuation discount between its market value and that of its one-third stake in Chinese internet group Tencent.
The Listing of MultiChoice frees the company to fend for itself in an increasingly competitive market where Netflix is already supplying viewers with TV content and Hollywood hits.
The success of MultiChoice helped Naspers evolve into one of the world’s biggest players in e-commerce. MultiChoice reaches around 14 million households in 50 African countries, offering both paid-TV products and a streaming service called Showmax.
Meanwhile, the company has said there are more than 25 million households across the continent yet to be captured by its traditional pay-TV business.
About Nasper and MultChoice
Founded in 1915, Naspers is a global internet and entertainment group and one of the largest technology investors in the world.
Operating in more than 120 countries and markets with long-term growth potential, Naspers builds leading companies that empower people and enrich communities.
MultiChoice, on the other hand, is a South African company that operates the DStv Satellite Television service, a major satellite TV service in Sub-Saharan Africa. MultiChoice was formed out of the subscriber-management branch of the MNet Terrestrial Pay TV company and broadcasts the full range of MNet channels on the DStv service.