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Naspers CEO explains Tencent move

Mar 23 2018 19:36
Carin Smith

Cape Town - The most important goal Naspers [JSE:NPN] hopes to achieve with its sale of 190 million shares in Tencent this week is to accelerate and scale its ecommerce businesses, CEO Bob van Dijk told Fin24 on Friday.

"We are excited about the returns from these (ecommerce) businesses so far - about a 23% annual return and even better over the last few years. We see further opportunity to keep investing and growing those businesses," he explained.

Van Dijk added that, despite having sold the 190 million shares in Tencent, Naspers is still bullish about the Chinese internet giant.

Naspers, which is Tencent’s biggest investor, on Thursday announced an accelerated offering of almost 190 million shares in Tencent, equal to about 2% of the Chinese firm's issued share capital. The sale raised $9.8bn (about R116bn) and reduced Naspers' stake in Tencent from 33.2% to 31.2%.

Since investing in Tencent in 2001, Naspers has not sold any of its shares up to now. The shares were offered to institutional investors globally, subject to customary selling restrictions.

"We are true believers in the ability of Tencent. It has served us and our shareholders very well, and continues to do so. We also saw the opportunity to grow more in other segments and wanted to free up some capital for that. We are bullish about Tencent, but also bullish to grow our other businesses to scale," said Van Dijk.

The Chinese government is supportive of the tech sector, and realises that companies like Tencent are instrumental for the future.

Focus on classifieds

Van Dijk explained that Naspers' core ecommerce focus remains on generalist classifieds. The group has already been active in this sector for about seven years and has rolled out businesses in many countries.

"Many of the businesses have grown organically into 40 markets, and many are the market leaders in their respective markets. Our core business won't change, but we believe 'adjacencies' can create value too," said Van Dijk.

"The important thing for us is to make sure this (process) is driven by our confidence in our online businesses, and that is what we want to use opportunities in."

He pointed out that the sale of some of its Tencent shares does not change the Naspers profile. The company committed not to sell any more of its Tencent shares "for at least three years".

By late afternoon on Friday, Naspers shares were trading up 3.8% at R3 174.47.

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naspers  |  tencent  |  bob van dijk  |  tech


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