JOHANNESBURG – Africa’s largest publicly traded company, Naspers Ltd., is grappling with an unusual problem: it delivered an incredibly good investment that has now become a headache.
Naspers bought a third of Tencent Holdings Ltd. in 2001, years before the operator of the WeChat messaging app became China’s most valuable publicly traded company. The stake itself is now worth more than $ 100 billion more than Naspers’ market value, despite the company’s other profitable activities in areas such as online advertising, payments and retail.
The difference has puzzled Naspers executives as to how to unlock shareholder value without making money from one of the world’s most successful technology companies. The problem has become more acute as the gap widened to new levels over the past year, as the coronavirus-induced rally in technology stocks pushed up valuations of Tencent and other tech companies.
“I don’t think there is a senior person at the group level who is not involved in thinking about this problem and working on it,” said Basil Sgourdos, Naspers chief financial officer. Mr. Sgourdos said executives are exploring more than 10 ideas to narrow the valuation gap, but declined to explain what options they are considering. Issues that every successful candidate must overcome include tax, regulation, balance sheet structure, and debt.
“You learn something with every idea and the unpacking,” said Mr. Sgourdos. “That is very valuable [intellectual property] in finding the final solution. ”