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MultiChoice South Africa Seals Naspers Split With Dividend Plan

Africa’s largest pay-TV business MultiChoice plans to cough up a 2.5 billion rand ($181 million) dividend two years after leaving its mother-ship of three decades - e-commerce and media group Naspers - and getting a listing solo in South Africa.

Tim Jacobs, MultiChoice’s Chief Financial Officer recently announced that the firm would make its first payment to shareholders in 2020 after the Johannesburg Stock Exchange (JSE) approved Naspers’ application to spin-off and list the pay-TV company.

Jacobs said that getting an individual listing would see MultiChoice spend its strong subscriber revenue on further expansion and on fighting off stiff competition from streaming giants like Netflix.

For Naspers, the listing of MultiChoice, which is expected to kick-off on Feb. 27, will mark the completion of its first significant effort towards narrowing a discount between its market value and the value of its stake in the Chinese tech company Tencent.

According to Refinitiv data, Naspers holds a 31.1 percent stake in Tencent, worth an estimated $128 billion. Naspers itself is worth more than $100 billion - around 22 percent less - and investors have urged Bob van Dijk, Naspers’ CEO to close the gap.

Calvo Mawela, MultiChoice’s CEO said that separating from Naspers provides an opportunity to invest and that the company planned to deliver high returns to its shareholders.

Tim Jacobs said in a telephone interview that the pay-TV operator planned to pursue an aggressive growth strategy with over 25 million households across the African continent that have yet to be captured by its traditional pay-TV business.
Jacobs added that MultiChoice also wanted to drive the increased uptake of Showmax as access to broadband increases, with a focus on South Africa for the immediate future and areas like Nairobi, Kenya also offering attractive opportunities.

MultiChoice’s shares will be unbundled to the current Naspers shareholders. The “N” class of shareholders are to receive one MultiChoice share for every Naspers share, and the “A” shareholders will get one MultiChoice share for every five “A” shares in Naspers.

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