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A $100 billion tech company you’ve never heard of just listed in Europe
* Prosus, a spinoff of South African consumer internet group Naspers valued at $100 billion, listed on the Amsterdam Euronext exchange Wednesday.
* The group’s best-known investment is a 31% stake in Chinese tech giant Tencent.
* The addition of Prosus to the Amsterdam exchange shakes up Europe’s tech landscape, with the company instantly becoming the continent’s second-biggest tech company.

Elizabeth Schulze
PUBLISHED 11 September 2019

Europe has lamented its lack of big internet technology companies capable of competing with U.S. and Chinese giants like Google, Facebook, Alibaba and Tencent.

Overnight, the continent’s fortunes changed in the form of a $100 billion consumer internet company that listed publicly Wednesday in Amsterdam.

The company is called Prosus, and it’s a spinoff of South African consumer internet conglomerate Naspers. Prosus said its market capitalization on its first day of trading is roughly $100 billion, making it one of the 10 biggest consumer internet groups in the world.

“The listing of Prosus is an exciting step forwards for the group, giving global technology investors direct access to our unique and attractive portfolio of international consumer internet businesses,” Naspers and Prosus Group CEO Bob van Dijk said in a press release Wednesday.

Prosus is not a consumer internet business itself, meaning it doesn’t offer digital services under its own brand like Facebook or Alibaba, for example. Instead, it invests in a portfolio of global internet firms in sectors ranging from payments and fintech (financial technology) to food delivery.

The group’s best-known investment is a 31% stake in Chinese tech giant Tencent, a gaming titan and owner of the hugely popular messaging app WeChat. Naspers made a $32 million investment in Tencent in 2001, a bet now worth $130 billion.

Under the new structure, Prosus will hold Nasper’s Tencent stake, as well as positions in other firms like Russian social media company Group and German food delivery service Delivery Hero. Naspers will remain a majority owner of the new company.

Europe playing catch-up

The addition of Prosus to the Amsterdam exchange shakes up Europe’s tech landscape, with the company instantly becoming one of the biggest tech entities in the region. According to data compiled by Reuters, it is only outmatched in size by German software firm SAP, which is valued at roughly $135 billion.

Europe has lagged behind the U.S. and China as a home for big tech companies. Of the 20 biggest internet companies by value in 2018, none were headquartered in Europe, according to data from the World Economic Forum. Last month, reports emerged that the EU had drafted a plan for a sovereign wealth fund to invest in “high-potential European companies” that could compete with U.S. and Chinese big tech firms.

“Naspers believes that the choice of Euronext Amsterdam is, and will be, beneficial to the company as Euronext markets are some of the largest, most integrated and proven capital markets in Europe,” the company said in its prospectus.

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Specuvestor: Asset - Business - Structure.
Hi All

Our take on Prosus.

Thank you.

Prosus/Naspers was an early investor in Tencent. Would they not face a very substantial tax bill should they decide to monetize their holdings?

IMO, the conglomerate discount is not as good as it looks at first glance.
We do not think that Prosus will monetise Tencent. That will always form the the core of their investment portfolio, and thus the conglomerate discount will always be present in Prosus as long as they are an investment holding company. What will most likely happen is that Nasper continue to sell shares in Prosus to do share buyback of their own share. This will increase the free float on Prosus and result in a larger weighting on the Stoxx 50 allowing Nasper to sell more Prosus share without depressing the share price. We believe that is Nasper ultimate aim.

What we are highlighting in the article is that there is multiple ways for Prosus to monetise their investment in the 1. Classified 2. Fintech and 3. Food Delivery Segment. The ability to monetise these assets through either a sale process, IPO or M&A would help crystallise their investment into cash or listed shares.

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