Naspers plans share swap with Prosus in effort to boost value

South African technology giant, Prosus, has announced plans to acquire up to 45.4% of its parent company Naspers by issuing new shares in a strategic share swap. The move is aimed at boosting the value of both companies and creating value for shareholders in the short and long term. The Group CEO of Prosus and Naspers, Bob van Dijk, joined CNBC Africa to discuss the objectives and potential outcomes of this share swap. Van Dijk expressed his excitement about the transaction, stating that it is expected to create more than $10 billion in value in the short term, which will benefit shareholders of both Naspers and Prosus. He highlighted that the deal will not only provide immediate value but also set the companies up for future success. Prosus plans to become a Euro Stoxx 50 top 20 company with a free float of over $100 billion, making it an attractive investment opportunity for global tech investors. Van Dijk addressed concerns about previous attempts to unlock value through similar transactions, noting that the success of the previous share swap with Prosus demonstrated the benefits of diversifying the shareholder base and attracting international investors. He emphasized that by retaining a controlling stake in Prosus, Naspers will continue to be a dominant player in the market, ensuring sustained value creation. When questioned about the decision to not increase their stake in Tencent, Van Dijk explained that Tencent remains a key asset for the company, with its strong management team and exceptional performance in the Chinese market. He reaffirmed their commitment to holding onto their stake in Tencent for the long term, citing the company's continued growth potential in the dynamic Chinese tech landscape. Addressing concerns about the current high valuations of tech companies, Van Dijk acknowledged the significant increase in valuations driven by the shift towards online services during the pandemic. He emphasized the importance of being selective in investments and focusing on companies where value can be added. While acknowledging the abundance of capital in the market, Van Dijk noted the potential impact of inflation risks on valuations, but refrained from labeling the current situation as a bubble. In conclusion, the share swap between Naspers and Prosus represents a strategic move to unlock value for shareholders and position the companies for sustained growth in the competitive tech industry.