JOHANNESBURG – Africa’s largest listed company, Naspers Ltd., is struggling with an unusual problem: it has made an incredibly good investment, which has now become a headache.
Naspers bought a third of Tencent Holdings Ltd. in 2001, years before the operator of the WeChat messaging application became the most valuable listed company in China. The stake itself is now worth more than $ 100 billion more than Naspers’ market value, despite the company’s other profitable companies in areas such as online advertising, payments and retail.
The difference presented the directors of Naspers with the enigma of determining how to unlock shareholder value without cashing in on one of the most successful technology companies in the world. The problem has become more acute as the gap widens to new levels in the past year, when the coronavirus-induced rally in technology stocks has garnered ratings from Tencent and other technology companies.
“I don’t think there is a senior person at the group level who is not involved in thinking about this issue and working on it,” said Basil Sgourdos, chief financial officer at Naspers. Mr Sgourdos said directors were exploring more than 10 ideas to close the evaluation gap, but he declined to explain what options they were considering. Issues that any successful candidate will have to overcome include tax, regulations, balance sheet structure and debt.
“With each idea and unpacking it, you learn something,” said Mr. Sgourdos. “It is very valuable [intellectual property] in finding the final solution. ”