Naspers spends R44bn in 10 months buying back shares

Naspers has now bought back 21% of its shares since launching the largest share repurchase programme in the JSE’s history, together with international unit Prosus.

On Thursday, the technology investment group said it had cumulatively repurchased 13,084,582 Naspers shares as part of the buyback programme, representing 3.004% of Naspers N shares in issue, between August 25 2023 and July 3 2024. 

It spent R43.79bn on the buybacks during this period. 

According to JSE rules, Naspers is required to disclose each time it buys another 3% of its free float. 

The group has mainly funded the buybacks through selling off shares in Amsterdam-listed Prosus. From August to July, 72,106,625 Prosus shares were sold, netting about R43.59bn. 

The Naspers stable launched the buyback programme in 2022 after winding down an unpopular cross-shareholding structure with Prosus.

The structure was set up in 2021 via a share swap deal under which Prosus issued shares to buy just more than 45% of Naspers, effectively moving part of Naspers from Johannesburg to Euronext in Amsterdam. The unpopular, convoluted deal was aimed at shrinking the discount between the value of the two companies and their stake in Chinese moneymaker Tencent.

But the structure did not reduce the discount, forcing the company to launch an open-ended share repurchase programme that was the latest in a string of corporate actions undertaken by then CEO Bob van Dijk to crush the valuation shortfall.

In June, Prosus reported that 22% of its free float had, up to that point, been repurchased for $26bn (R477bn). The group says this has created $32bn in value since the start of the programme based on the narrowing of the discount and the total value of the net asset value (NAV) per share increasing after applying the prevailing discount.

By June 21, a total of 637-million Prosus and 42-million Naspers shares had been repurchased.

Ervin Tu, president and chief investment officer of the group, told the media last week that the share buyback remains open-ended.

“Our principal focus is on improving our businesses and creating value. We have to think carefully about how we share that value with our shareholders over time. That is what underpinned our decision two years ago to announce the share repurchase programme,” Tu said.

“We say it’s open-ended but there are natural constraints. We have already purchased 22% of our free float. It’s not like this will continue in perpetuity. The discount is still elevated — and beyond what we think is palatable. We have every intention to reduce the discount further.”

With Kabelo Khumalo

gavazam@businesslive.co.za