Prosus will look to sell or list some of its businesses that no longer meet its high-return expectations after shareholders voted to untangle its complex cross-holding structure with Naspers.
Prosus CEO Bob van Dijk told BusinessTimes in an interview that the untangling of the two companies is expected to attract new investors to the business.
Van Dijk said investors had been interested in the company but stopped short of investing in it because of the holding structure. “I think removing the cross-holding will enlarge our shareholder base,” he said.
Investors also raised concerns that “we have nice businesses, but we don’t make profits, and I think that leads to the pressure on the discount, and when we deliver profitable business, that will make a big difference.”
The move is expected to narrow the discount between Prosus’ and Naspers’ market cap and net asset value through an open-ended share buyback programme.
The company may sell or list some businesses separately to unlock value and help reduce its trading discount.
“We have assets that are hidden, and when the market conditions improve a bit, we think we can crystallise some of these businesses through an IPO, sale, or consolidation,” Van Dijk said.
Prosus recently announced that it would sell part of its stake in emerging-markets financial technology company PayU to Israel’s Rapyd for R11.3 billion ($610 million).
The deal will exclude the company’s biggest payments market in India and its units in Turkey and Indonesia, Prosus said in a statement.
Rapyd also recently entered a payment partnership deal with Multichoice Group, previously owned by Naspers.
Prosus is reducing costs and doubling down on efforts to turn profitable by the first half of 2025. The company previously indicated it was working on multiple situations that could include mergers and sales as it seeks to boost shareholder returns.
The latest deal follows a strong performance in Prosus’s payments and fintech segment, with revenue growth of 52% to $903 million in the last financial year.
Van Dijk said the decision to sell part of its stake was part of the company’s plans to unlock value for businesses “that we think are valuable but may not fit so well any more, or that are undervalued.”
“We would either list them or sell them, and this is an example where we had a business that I think did not fit so well within the group any more but had real value, so we sold it.”
During the AGM this week, Van Dijk said the group was “strict about divesting from assets that no longer meet our high-return expectations.”