South Africa’s Naspers Limited said it will lists Multichoice on the Johanesburg Stock Exchange, JSE, signalling a gradual exit from the business as the Internet giant seeks to trim its losses.
Multichoice which owns DSTV, a payTV operator across Africa, Supersport and MNet is said to be running its African operations at a loss in the last two years.
“The new company will be named MultiChoice Group and will include MultiChoice South Africa, MultiChoice Africa, Showmax Africa, and Irdeto.”
Naspers CEO Bob van Dijk said: “This marks a significant step for the Naspers Group as we continue our evolution into a global consumer Internet company. Listing MultiChoice Group via an unbundling aims to unlock value for Naspers shareholders and at the same time create an empowered, top 40 JSE-listed African entertainment company.”
The transaction is also expected to create further value for Phuthuma Nathi broad-based black economic empowerment shareholders.
“Naspers intends to allocate – for no consideration – an additional 5% stake in MultiChoice South Africa to PN shareholders, prior to the unbundling, to increase MultiChoice Group’s BBBEE shareholding. This means that the PN shareholders’ interest in MCSA and its dividend flows is expected to increase by 25%.”
Video Entertainment CEO Imtiaz Patel said: “Listing and unbundling MultiChoice Group is intended to create a leading entertainment business listed on the JSE that is profitable and cash generative. We offer an unmatched selection of local and original content, as well as a world-class sports offering.”
Naspers said its Video Entertainment business is one of the fastest growing pay-TV operators globally and its multi-platform business entertains 13.5 million households across Africa.
“In the last financial year, the business added 1.5 million subscribers, and generated revenue of R47.1 billion and trading profit of R6.1 billion,” said the company.
“Naspers will retain its primary listing on the JSE as well as its interests in Media24. MultiChoice Group is anticipated to list on the JSE and simultaneously unbundle in the first half of 2019, subject to the approval of the requisite regulatory authorities.”
There are no indication that Naspers would list its other African operations separately in future. However, the company has serious resistance on its operation in key markets such as Nigeria where regulators have sued the company over increments in its payTV subscription rates.