Verster believes this will require some very astute decisions.Byron Lotter, portfolio manager at Vestact, puts a more conservative valuation on Multichoice – valuing it at 12 times profits, which would value the business at R73.2 billion. In the midst of one of the most turbulent political and economic periods in South African history, the launch was seen merely as a daring experiment with many sceptical of the idea. Multichoice, which owns DStv, is listing on the JSE at the end of February – but investors are sharply divided about how the market will value the company. As a result, PN shareholders’ indirect interest in MCSA has increased from 20% to 25% which will increase by 25% their share of dividend flows, Naspers said.A R1.4 billion fund has been set up for a new initiative called Naspers Foundry – to be launched in the first half of 2019 – which will back technology start-ups in South Africa that seek to address major societal needs.The remaining R3.2 billion of the commitment is to be injected into Naspers’ existing businesses and this has already started, the group said.MCG provides entertainment to around 14 million households across 50 countries on the African continent.Naspers says it has completed the unbundling of its shares in MultiChoice Group (MCG) to Naspers shareholders following the listing of MCG on the Johannesburg Stock Exchange (JSE) on 27 February 2019. There are wildly divergent views:But the lack of dependable and affordable broadband access in many of the African countries that Multichoice operates in gives the company some breathing room in the medium-term against competitors like Netflix, he says.“Still, overall it’sa very cash flow generative business - even taking Nigeria into account.”At this valuation, Multichoice probably won’t be included in the JSE’s top 40 index.This is significant: Index funds like the Satrix Top 40, with R282 billion invested in it, track the top forty shares. Shareholders in media firm Naspers, which owns Multichoice, will receive shares in Multichoice. I think they’ve got bigger problems on their way from losing existing revenues.PSG Wealth portfolio manager Schalk Louw estimates a fair value for Multichoice is around R131 a share. Multichoice has countered that with its own streaming service Showmax, but another big challenge is live sport.Gryphon research analyst and portfolio manager Casparus Treurnicht says Multichoice is probably best positioned around a PE ratio of approximately 10 times.A key reason why Naspers is unbundling Multichoice is to create value for its shareholders.By listing it separately, suddenly Naspers shareholders will also own shares in Multichoice – and the unbundling is not expected to affect the Naspers share price at all.Amid the decline of “linear television” – broadcast TV with fixed schedules - Multichoice would need to take on video-on-demand competitors with its own original content, while also protecting its current income stream of premium package subscribers at the same time. Naspers shares are trading far below what its assets are worth. “It has already done a lot to become a digital broadcaster, to compete with video on demand.” “I do feel however that streaming sport is the future and I know Multichoice will be well aware of this. The problem for Multichoice is that the rights to these leagues and events are priced in dollars, euros or pounds. Shareholders in media firm Naspers, which owns Multichoice, will receive shares in Multichoice.Jean Pierre Verster, portfolio manager at Fairtree Capital, estimates that the company is probably worth around R120 a share – but it could even reach R180.Apart from this possible boon, Louw is also cautiously optimistic about Multichoice’s outlook as a separate listed entity. MultiChoice, its subsidiaries, affiliates and associates ("MultiChoice Group") is one of the leading video entertainment operators on the African continent, and one of the fastest growing pay-TV broadcast providers globally, entertaining 13.9 million households (as at 30 September 2018) across 50 countries. This week, the JSE gave the go-ahead for the listing. (But Multichoice) subscriptions are in rands and other sub-Saharan currencies, which have mostly depreciated in recent years. Head of Wakanda Project.
Below are several of the prominent companies which Naspers owns or has a significant stake in. MultiChoice has been in operation for the past 30 years and through its flagship product brand, DStv, the company delivers the latest and most compelling local and international content to millions of households across Africa.
“The unbundling of MultiChoice Group marks a significant step for Naspers, completing our transformation to a global consumer internet company, with effectively 100% of our revenues and profits now coming from online. Reatile …
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