Naspers has announced its intention to list its Video Entertainment business separately on the Johannesburg Stock Exchange (JSE) and simultaneously to unbundle the shares in this business to its shareholders. The new company will be named MultiChoice Group and will include MultiChoice South Africa, MultiChoice Africa, Showmax Africa, and Irdeto.
Commenting on the transaction, 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.”
Video Entertainment CE Imtiaz Patel said: “Listing and unbundling MultiChoice Group is intended to create a leading entertainment company listed on the JSE that is profitable and cash generative. We offer an unmatched selection of original content made in Africa, for Africans, as well as a world-class sports offering. Our leadership team is diverse, experienced and well-positioned to take the company forward.”
Naspers’ Video Entertainment business is one of the fastest growing top pay-TV operators globally and its multi-platform business entertains 13.5 million households across Africa. In the last financial year, the business generated revenue of ZAR47.1 billion and trading profit of ZAR6.1 billion. It employs more than 9,000 people in Africa and indirectly creates economic prosperity for over 20,000 more who are employed by its various partners and suppliers across the continent.
MultiChoice Group is expected to be unbundled with limited leverage, providing it with the necessary financial flexibility to pursue growth opportunities in African video entertainment. Africa is one of the fastest-growing continents by both GDP and population, its middle-class is rapidly expanding and the penetration of video entertainment is still relatively low. The business is also positioning itself for the future by offering online streaming services, including Showmax and DStv Now.
Looking ahead, Patel said: “There are significant growth opportunities for MultiChoice Group in Africa. The combination of MultiChoice’s reach, Showmax’s cutting-edge internet television service, and Irdeto’s 360 security suite will provide a unique offering. Our customer focus, international and local content and leading-edge technology places MultiChoice Group at the forefront of the African digital transformation.” Naspers will retain its primary listing on the JSE. 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.