Naspers Ltd. spins off African pay-TV unit MultiChoice Group Ltd for $3 Billion


Naspers Ltd. spun off African pay-TV unit MultiChoice Group Ltd. at an initial valuation of about 42 billion rand ($3 billion), enabling the continent’s biggest company to focus on its current incarnation as a global internet-technology firm.

  • MultiChoice shares started trading at 95.5 rand in Johannesburg, and was at 96.15 rand as of 9:13 a.m. Naspers, which makes up almost a fifth of Johannesburg’s stock exchange, traded 2.3 percent lower at 3,069.99 rand after the spin off.

Key Insights

  • MultiChoice’s valuation could eventually settle at about $5 billion to $6 billion, according to Bloomberg Intelligence analyst John Davies. The shares may be volatile in the meantime, however, as Naspers shareholders who automatically receive MultiChoice stock take time to decide whether or not they want a pure Africa-TV play.
  • Naspers has come a long way since founding MultiChoice in 1985, most notably making a jackpot investment in Chinese Internet giant Tencent Holdings Ltd. in 2001. That 31 percent stake is now valued at about $129 billion, more than Naspers as a whole, and an effort to close the deficit is one of the reasons behind the MultiChoice separation.
  • MultiChoice has almost 14 million subscribers, of which about half are in South Africa. Among its challenges as a standalone company will be to reverse slowing revenue growth on the rest of the continent, where cheaper alternatives — including Netflix Inc. — have sprung up alongside rising household incomes and faster internet speeds.

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  • For more detail, read the pre-listing statement here.

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