Author Topic: NPN - Naspers Limited (JSE)  (Read 17417 times)

dontdodebt

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Re: NPN - Naspers Limited (JSE)
« Reply #40 on: March 26, 2019, 11:30:27 AM »
Ok thanks.


Lakesider

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Re: NPN - Naspers Limited (JSE)
« Reply #41 on: March 26, 2019, 12:31:22 PM »
Retaining the 75% at Naspers will still cause the index over weighting problems that CEO describes.
 
I speculate that this may be part of strategy to distance themselves from south Africa. They spun off African assets, I read they are opening a new office in US, now spinning off further assets.

jsgcapital13

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Re: NPN - Naspers Limited (JSE)
« Reply #42 on: March 26, 2019, 04:12:40 PM »
The deal website has more details, including video presentation from CEO/CFO with more color on deal rationale:

https://www.newglobaltechgroup.com/en/home/

I don't see how this fixes the Tencent discount issue at Naspers. Perhaps NewCo valuation has less of a discount once listed in Amsterdam, though I suspect there will still be some discount to account for 1) super majority shareholder 2) holding co discount 3) unclear tax liability. At JSE listed Naspers, there is likely to be another layer of discount, similar to double CHTR discount at GLIBA (GLIBA owns LBRD - at a discount, arguably - which owns CHTR at a discount, more clearly).

I can appreciate that listing in Amsterdam will create new investor demand and shift some market cap from JSE to Amsterdam exchange, but it also adds another layer of complexity, which normally warrants its own discount. IMO, this is a mess, inelegant solution to address the significant SOTP discount, but at least it shows the company is being proactive/thoughtful about addressing the discount. Management has rebuffed the idea of share repurchases as they believe they can capture more value by investing capital at a higher IRR/NPV, though maybe we see buybacks sooner than later if this step does not prove fruitful. At the very least, I would like them to announce some buyback program so they can have the flexibility to purchase shares opportunistically based on the prevailing discount dynamic. 

 

jsgcapital13

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Re: NPN - Naspers Limited (JSE)
« Reply #43 on: March 26, 2019, 04:20:02 PM »
this screenshot is the key slide from the presentation they released yesterday.

using the 2.2b share count for the US ADRs, each 5% reduction to the discount = $3.86 to the share price or +8.6% using $45 last close.

villainx

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Re: NPN - Naspers Limited (JSE)
« Reply #44 on: March 26, 2019, 04:50:44 PM »
If asking for advice isn't inappropriate.  I have a fairly small starter position, which means even more minuscule position in MCHOY.  Originally got in for SOTP and exposure to Africa and savvy deal makers.  But thinking about exiting because are these maneuvering really adding value, my portfolio is getting messy, and I'm not sure what exactly NASPER is going to end up being (assuming more spins). 

Any thoughts?

MrB

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Re: NPN - Naspers Limited (JSE)
« Reply #45 on: March 27, 2019, 09:05:22 AM »
The deal website has more details, including video presentation from CEO/CFO with more color on deal rationale:

https://www.newglobaltechgroup.com/en/home/

I don't see how this fixes the Tencent discount issue at Naspers. Perhaps NewCo valuation has less of a discount once listed in Amsterdam, though I suspect there will still be some discount to account for 1) super majority shareholder 2) holding co discount 3) unclear tax liability. At JSE listed Naspers, there is likely to be another layer of discount, similar to double CHTR discount at GLIBA (GLIBA owns LBRD - at a discount, arguably - which owns CHTR at a discount, more clearly).

I can appreciate that listing in Amsterdam will create new investor demand and shift some market cap from JSE to Amsterdam exchange, but it also adds another layer of complexity, which normally warrants its own discount. IMO, this is a mess, inelegant solution to address the significant SOTP discount, but at least it shows the company is being proactive/thoughtful about addressing the discount. Management has rebuffed the idea of share repurchases as they believe they can capture more value by investing capital at a higher IRR/NPV, though maybe we see buybacks sooner than later if this step does not prove fruitful. At the very least, I would like them to announce some buyback program so they can have the flexibility to purchase shares opportunistically based on the prevailing discount dynamic.

Fair comment, but what might be worth considering is wouldn't the first steps on the way to the perfect scenario you're envisioning look like the ones they've recently taken?
Untangling Naspers is a process. 

jsgcapital13

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Re: NPN - Naspers Limited (JSE)
« Reply #46 on: March 27, 2019, 07:28:44 PM »
The deal website has more details, including video presentation from CEO/CFO with more color on deal rationale:

https://www.newglobaltechgroup.com/en/home/

I don't see how this fixes the Tencent discount issue at Naspers. Perhaps NewCo valuation has less of a discount once listed in Amsterdam, though I suspect there will still be some discount to account for 1) super majority shareholder 2) holding co discount 3) unclear tax liability. At JSE listed Naspers, there is likely to be another layer of discount, similar to double CHTR discount at GLIBA (GLIBA owns LBRD - at a discount, arguably - which owns CHTR at a discount, more clearly).

I can appreciate that listing in Amsterdam will create new investor demand and shift some market cap from JSE to Amsterdam exchange, but it also adds another layer of complexity, which normally warrants its own discount. IMO, this is a mess, inelegant solution to address the significant SOTP discount, but at least it shows the company is being proactive/thoughtful about addressing the discount. Management has rebuffed the idea of share repurchases as they believe they can capture more value by investing capital at a higher IRR/NPV, though maybe we see buybacks sooner than later if this step does not prove fruitful. At the very least, I would like them to announce some buyback program so they can have the flexibility to purchase shares opportunistically based on the prevailing discount dynamic.

Fair comment, but what might be worth considering is wouldn't the first steps on the way to the perfect scenario you're envisioning look like the ones they've recently taken?
Untangling Naspers is a process.

the perfect scenario - at least insofar as i imagine it - is that naspers is able to deploy its capital at double digit+ IRRs (as it has done even when excluding the tencent miracle) while tencent continues to grow. as tencent grows, naspers trims its position and uses proceeds to buy back stock at a significant NAV discount, which augments the NAV/share growth. In my opinion, this is preferable to Naspers simply spinning off the Tencent position (creating a Altaba / Alibaba structure). The NAV discount is an opportunity to create value in an incredibly low risk way. having multiple layers of ownership adds to the complexity, which could lead to the discount persisting, though as mentioned above, the new listing hopefully creates new demand for the holding company, which should help the discount [there are puts and takes to this step, but i agree (/hope) that it should be a net-benefit].

i'd like to see executive compensation tied to narrowing the discount in some fashion. they should not continue to get paid based on what tencent does (ie yesteryear's grandslam)


Lakesider

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Re: NPN - Naspers Limited (JSE)
« Reply #47 on: March 28, 2019, 08:17:18 PM »
I am considering selling of my Naspers shares and buying the Dutch spinoff. The parent is likely still going to have the same problems on the JSE so the Spin will outperform the parent. In the short term I agree this complicates the structure and could increase the discount.

Thoughts?

bjakes00

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Re: NPN - Naspers Limited (JSE)
« Reply #48 on: March 29, 2019, 12:48:17 PM »
The deal website has more details, including video presentation from CEO/CFO with more color on deal rationale:

https://www.newglobaltechgroup.com/en/home/

I don't see how this fixes the Tencent discount issue at Naspers. Perhaps NewCo valuation has less of a discount once listed in Amsterdam, though I suspect there will still be some discount to account for 1) super majority shareholder 2) holding co discount 3) unclear tax liability. At JSE listed Naspers, there is likely to be another layer of discount, similar to double CHTR discount at GLIBA (GLIBA owns LBRD - at a discount, arguably - which owns CHTR at a discount, more clearly).

I can appreciate that listing in Amsterdam will create new investor demand and shift some market cap from JSE to Amsterdam exchange, but it also adds another layer of complexity, which normally warrants its own discount. IMO, this is a mess, inelegant solution to address the significant SOTP discount, but at least it shows the company is being proactive/thoughtful about addressing the discount. Management has rebuffed the idea of share repurchases as they believe they can capture more value by investing capital at a higher IRR/NPV, though maybe we see buybacks sooner than later if this step does not prove fruitful. At the very least, I would like them to announce some buyback program so they can have the flexibility to purchase shares opportunistically based on the prevailing discount dynamic.

Fair comment, but what might be worth considering is wouldn't the first steps on the way to the perfect scenario you're envisioning look like the ones they've recently taken?
Untangling Naspers is a process.

the perfect scenario - at least insofar as i imagine it - is that naspers is able to deploy its capital at double digit+ IRRs (as it has done even when excluding the tencent miracle) while tencent continues to grow. as tencent grows, naspers trims its position and uses proceeds to buy back stock at a significant NAV discount, which augments the NAV/share growth. In my opinion, this is preferable to Naspers simply spinning off the Tencent position (creating a Altaba / Alibaba structure). The NAV discount is an opportunity to create value in an incredibly low risk way. having multiple layers of ownership adds to the complexity, which could lead to the discount persisting, though as mentioned above, the new listing hopefully creates new demand for the holding company, which should help the discount [there are puts and takes to this step, but i agree (/hope) that it should be a net-benefit].

i'd like to see executive compensation tied to narrowing the discount in some fashion. they should not continue to get paid based on what tencent does (ie yesteryear's grandslam)

If I could, I’d upvote this comment. I couldn’t agree more (and apologies for the low value add comment in advance)