Naspers to sell Allegro for $3.25bn

2016-10-14 17:30 - Aaron Kirchfeld, Sarah Syed and Adrian Krajewski
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Naspers. (Duncan Alfreds, Fin24)

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Johannesburg - Cinven, Permira and Mid Europa Partners agreed to buy Naspers' [JSE:NPN] Polish online auction site Allegro for $3.25bnn, taking on rivals such as EBay in the eastern European country.

The deal is part of Naspers’s strategy to profit from its investments, according to a statement from the company on Friday. Naspers acquired Allegro in 2008 for about $1.5bn. The acquiring group beat out other private-equity consortia including CVC Capital Partners and General Atlantic and a group composed of Advent International Corp. and Hellman & Friedman LLC, people familiar with the matter had said.

Cape Town-based Naspers is facing challenges from US technology companies and weaker African currencies as the continent’s biggest company by market value tries to grow its internet and pay-TV businesses. Naspers hired Morgan Stanley to advise on a potential sale of Allegro, people familiar with the plans said in June.

Naspers rose earlier in the day after Bloomberg first reported on the sale. The stock gained as much as, 6.4% in Johannesburg and was trading 5.8% higher to R2 318.95 at 16:14, giving the company a market value of over R1trn ($71bn).

If completed, the deal will be one of the five largest acquisitions of a Polish asset ever, according to data compiled by Bloomberg. Companies in the country have announced $3.5bn in mergers and acquisitions this year, down about 50% from the same period a year ago.

Naspers plans to use the proceeds to repay debt, fund its e-commerce businesses and finance new acquisitions.

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