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NASPERS LIMITED - Unbundling of MultiChoice Group Limited Shares to Naspers shareholders and listing of MultiChoice Group Limited

Release Date: 21/01/2019 17:50
Code(s): NPN     PDF:  
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Unbundling of MultiChoice Group Limited Shares to Naspers shareholders and listing of MultiChoice Group Limited

NASPERS LIMITED  
(Incorporated in the Republic of South Africa)
(Registration number: 1925/001431/06)
Share code: NPN       ISIN: ZAE000015889
LSE ADS code: NPSN    ISIN: US 6315121003
("Naspers" or the "Company")

Unbundling of MultiChoice Group Limited Shares to Naspers
shareholders and listing of MultiChoice Group Limited on the
JSE Limited

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, 
IN OR INTO ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT
OR WOULD REQUIRE FURTHER ACTION FOR SUCH PURPOSE

1. INTRODUCTION
   Further to the announcement issued by Naspers on the JSE's Stock Exchange News
   Service ("SENS") on 17 September 2018, Naspers proposes to unbundle its video
   entertainment business ("Business") currently held by its wholly owned subsidiary,
   MultiChoice Group Limited ("MultiChoice"), to the holders of its "N" ordinary
   shares and "A" ordinary shares, respectively, and list the shares in MultiChoice on
   the JSE Limited ("JSE") as a primary listing.
 
   To facilitate the Unbundling and Listing (as defined below), MultiChoice was
   incorporated as a wholly owned subsidiary of MIH Holdings Proprietary Limited
   and, subsequent to the restructuring contemplated in the MultiChoice pre-listing
   statement issued today ("Pre-listing Statement"), includes MultiChoice South
   Africa Holdings Proprietary Limited ("MCSA"), Irdeto South Africa Proprietary
   Limited, Main Street 484 Proprietary Limited, Irdeto Holdings B.V., Showmax B.V.,
   MultiChoice Africa Holdings B.V., Digital Mobile Television Proprietary Limited,
   MultiChoice Botswana Proprietary Limited, MultiChoice Namibia Proprietary
   Limited and NMS Insurance Services (SA) Limited (and the subsidiaries, associates
   and/or affiliates of such entities as at the date on which the restructuring was
   implemented).

2. BACKGROUND AND RATIONALE FOR THE UNBUNDLING
   Naspers, its subsidiaries, affiliates and associates ("Naspers Group") has evolved
   from a traditional media business into a global internet and entertainment group.
   The Naspers Group has gone through many investment cycles, building successful
   businesses that generate healthy cash flows to support the next investment cycle.
   One of these success stories has been MultiChoice, which is one of the fastest growing
   pay-TV broadcast providers globally, entertaining 13.9 million households (as at
   30 September 2018) in 50 countries across multiple platforms, including digital satellite
   television and digital terrestrial television, as well as over-the-top ("OTT") content.

   Naspers has evolved in recent years into two distinct business lines: a high-growth
   global internet business with international focus; and a cash generative, African
   video entertainment business. The Naspers board of directors ("Board"), as part
   of its continuing review of the Naspers business operations, has determined that,
   given their divergent paths, there is no longer a strategic rationale for keeping both
   business lines together and there are no synergies between the two businesses.
   This also reflects the Naspers Group's continued shift towards becoming a global
   consumer internet company.

   As a result, the Board intends to unbundle ("Unbundling") the Business currently
   held by MultiChoice through a pro rata distribution in specie for no consideration of
   all the issued shares in MultiChoice held by Naspers, to holders of the "N" ordinary
   shares and "A" ordinary shares in Naspers, in terms of section 46 of the South
   African Companies Act, 2008 (as amended) ("Companies Act") and section 46 of
   the South African Income Tax Act, 1962 ("Income Tax Act"), and, simultaneously
   to list the issued shares in MultiChoice on the main board of the JSE as a primary
   listing ("Listing"). The Unbundling and Listing will result in Naspers shareholders
   holding a direct interest in MultiChoice rather than holding that interest through
   Naspers.

   The Board is of the view that the Unbundling could unlock value for Naspers
   shareholders. In particular, the Board expects the Unbundling and Listing to:

   - create an empowered, top 40 JSE-listed African entertainment company that is
     profitable and cash-generative, and therefore equipped to be at the forefront of
     the African digital transformation;

   - increase investment options for South Africans and international investors, while
     providing them with an opportunity to support a company focused on investment,
     growth and local community empowerment in South Africa, sub-Saharan Africa
     and the adjacent islands;

   - reinforce MultiChoice and Naspers's commitment to broad, socio-economic
     transformation in South Africa, through the allocation of an additional 5%
     stake in MCSA to, collectively, Phuthuma Nathi Investments (RF) Limited and
     Phuthuma Nathi Investments 2 (RF) Limited ("Phuthuma Nathi"), as detailed
     further below;

   - complete the transformation of Naspers into a global consumer internet
     company; and

   - improve focus of the respective management teams to pursue growth
     opportunities in the region for MultiChoice and Naspers.

   Both Naspers and MultiChoice will remain South African domiciled companies with
   their primary listings of shares on the JSE.

   In addition, Naspers will continue to operate and invest in several companies
   in South Africa, particularly in its core focus areas of consumer internet and
   ecommerce. Currently, these companies include Media24, Takealot, Mr D, OLX,
   Property24, AutoTrader SA, the Frontier Car Group and PayU. As an indication of
   Naspers's commitment to South Africa, Naspers has invested R6.9 billion over the
   past three years in developing its existing South African businesses and through
   M&A activity. In addition, Naspers also pledged (at the South Africa Investment
   Conference, that was held in October 2018) to invest a further R4.6 billion in new
   and existing technology companies in South Africa.

3. MULTICHOICE
   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. Its carefully curated
   local and international content is distributed across multiple platforms, including
   digital satellite and terrestrial television, as well as through OTT solutions. The
   MultiChoice Group is structured around the following three business segments:

   - South Africa, the MultiChoice Group's division that offers digital satellite
     television and subscription video-on-demand services to 7.2 million subscribers in
     South Africa (as at 30 September 2018). Connected Video, which forms part of the
     South Africa segment from a financial reporting standpoint, delivers online video
     entertainment services to subscribers;

   - Rest of Africa, the MultiChoice Group's division which offers digital satellite,
     online services and digital terrestrial television services to 6.7 million subscribers
     across Africa (as at 30 September 2018); and

   - Technology, which includes the MultiChoice Group's leading digital platform and
     application security division, Irdeto.

   As set out in the Pre-listing Statement issued today, in the past two fiscal years,
   the MultiChoice Group has grown its subscriber base by 14% compound annual
   growth rate ("CAGR"), and generated resilient organic revenue growth, while
   its profitability has improved. For the financial year ended 31 March 2018, the
   MultiChoice Group's subscriber base was 13.5 million, which represented a 13%
   increase over the financial year ended 31 March 2017. The MultiChoice Group's
   revenues were R47.5 billion compared to R47.7 billion the year before. The table
   below is replicated from the Pre-listing Statement and summarises the MultiChoice
   Group's subscriber base, revenue, and trading profit over the past three years.
   MultiChoice Group Financial Performance Summary
   
                                    Unit   FY15/16   FY16/17   FY17/18   
   Pay-TV subscribers               '000    10 411    11 942    13 476   
   Revenues                  ZAR million    46 797    47 708    47 452   
   South Africa              ZAR million    29 116    31 849    32 702   
   Rest of Africa            ZAR million    16 005    14 208    13 106   
   Technology                ZAR million     1 676     1 651     1 644   
   Organic revenue growth              %      n.a.      7.3%      6.6%   
   Trading profit            ZAR million     9 108     5 251     6 321   
   Trading profit margin %             %     19.5%     11.0%     13.3%   

   * The MultiChoice Group excludes the impact of currency fluctuations and mergers and acquisitions to
     assess key metrics on an organic basis, such as organic revenue growth outlined in the table above,
     which the MultiChoice Group considers the real growth of the underlying business segments.

   As a pioneer in the African pay-TV ecosystem, the MultiChoice Group played
   an important role in making information and entertainment easily accessible
   to the people of Africa. As a leading business in the region, the MultiChoice
   Group's investments have brought both social and economic benefits to the
   communities in which it operates. Today, the MultiChoice Group employs more
   than 9 000 people in Africa and indirectly creates economic prosperity for over
   20 000 more who are employed by its various partners and suppliers across the
   continent. The MultiChoice Group remains committed to broad, socio-economic
   transformation in South Africa, most notably through its Phuthuma Nathi share
   schemes that are aimed at empowering local communities.

4. B-BBEE TRANSACTION
   In 2006 and 2007, Naspers undertook one of the largest Broad-based Black Economic
   Empowerment transactions ("B-BBEE") in South Africa by enabling the acquisition
   of a stake in MCSA by black investors. Naspers arranged, structured and funded
   the sale of a 20% interest in MCSA to black investors through Phuthuma Nathi.
   Today Phuthuma Nathi comprises approximately 90 000 individual and institutional
   shareholders and its shares are listed on the Equity Express Securities Exchange.
   Through Phuthuma Nathi, MCSA has provided long-term, far-reaching benefits to
   B-BBEE shareholders, with an estimated return on investment of approximately
   17 times. Phuthuma Nathi shareholders have benefitted from:

   - Capital growth: Phuthuma Nathi shares have delivered meaningful share
     price appreciation - an initial investment of R10 per share (at the time of the
     B-BBEE transactions in 2006/2007) has increased to a price of approximately
     R130 per share as of the Last Practicable Date, which represents a CAGR of
     approximately 24%.

   - Cash flow: MCSA's strong financial performance (particularly cash
     generation) enabled meaningful dividend payments to Phuthuma Nathi
     shareholders which resulted in Phuthuma Nathi being able to repay its
     vendor funding in 2014, two years ahead of schedule. As such, Phuthuma
     Nathi now realises the full value of its MCSA dividends unencumbered,
     which has further driven the attractive cash flow profile. To date, Phuthuma
     Nathi shareholders have received approximately R6.2 billion in dividends,
     relative to a total investment of R675 million, which reflects an internal rate
     of return of approximately 30%.

   To underpin the MultiChoice and Naspers commitment to broad, socio-economic
   transformation and B-BBEE, Naspers and MultiChoice recently agreed to
   implement a new empowerment transaction at MCSA. This new transaction will be
   executed by allocating an additional 5% stake in MCSA to Phuthuma Nathi for no
   consideration (the "2018 Empowerment Transaction"). The 2018 Empowerment
   Transaction will be implemented on the Unbundling Operative Date and upon
   implementation, the Phuthuma Nathi shareholders' indirect interest in MCSA will
   increase from 20% to 25% and result in a 25% increase in Phuthuma Nathi's dividend
   flows. The Listing of MultiChoice may also increase Phuthuma Nathi's and its
   shareholders' potential upside in future value creation as a result of having a listed
   reference point.

   Further, post-implementation of the Listing and subject to obtaining the necessary
   Phuthuma Nathi board and shareholder approvals, it is MultiChoice's intention
   to enable the exchange of 25% of the Phuthuma Nathi shareholders' original
   shareholding (before the allocation of the additional 5% discussed above) for
   MultiChoice shares that will be freely tradeable, which is expected to unlock
   incremental value for Phuthuma Nathi shareholders.

5. NASPERS
   Founded in 1915, Naspers is a global internet and entertainment group and one of
   the largest technology investors in the world, operating some of the world's leading
   platforms in internet, video entertainment and media. Today, Naspers invests and
   operates in more than 120 countries and markets that the group believes have long-
   term growth potential, including China, Central and Eastern Europe, Russia, Africa,
   North America, Latin America, India, Southeast Asia and the Middle East.
   
   Naspers seeks to address big societal needs through technology by identifying
   changes in consumer behaviour early and building businesses that have scale, are
   profitable and generate healthy cash flows. The group's principal operations are
   in internet services and ecommerce (in particular, online classifieds, payments,
   online food delivery, etail, and online travel services) and media. The companies that
   Naspers has built, acquired and invested in are leaders in many of their markets,
   connecting people to each other and the wider world, and helping them improve
   their daily lives.
  
   In the financial year ended 31 March 2018, the Naspers Group revenue, measured
   on an economic interest basis, was US$ 20.1 billion, the trading profit was
   US$ 3.4 billion and core headline earnings were US$ 2.5 billion. Naspers executed
   well in the first half of the 2019 financial year, with Group revenue, measured on an
   economic interest basis, of US$ 11 billion, trading profit of US$ 2 billion and core
   headline earnings of US$ 1.7 billion.
  
   The Naspers Group's major listed associate investments include its 31.2% effective
   interest in Tencent Holdings Limited, the leading provider of internet and mobile
   telecommunication services in China, its 28.4% effective interest in Mail.ru Group
   Limited, one of the two leading internet, entertainment and social network platforms
   in Russia, its 43.1% effective interest in MakeMyTrip Limited, one of the largest
   online travel groups in India, and its 22.8% effective interest in Delivery Hero GmbH,
   a global leader in online food ordering.

6. UNBUNDLING
   6.1 Ratio of entitlement
       The Board intends to implement the Unbundling by way of a pro rata distribution
       in specie of ordinary shares of no par value in MultiChoice ("MultiChoice
       Shares") for no consideration to Naspers shareholders in terms of section 46 of
       the Companies Act and section 46 of the Income Tax Act. Naspers will distribute
       438 837 468 MultiChoice Shares ("Unbundled MultiChoice Shares") (being
       100% of the issued MultiChoice Shares and all of the MultiChoice Shares held
       by Naspers) to Naspers shareholders on the Naspers securities register at 17:00
       South African standard time on Friday, 1 March 2019 ("Unbundling Record
       Date and Time") on the terms as set out in this announcement. For more
       information on the MultiChoice American depository shares ("ADS") facility,
       and the issue of MultiChoice ADSs to holders of Naspers ADSs, please see
       paragraph 11 below.

       Naspers shareholders holding "A" and "N" ordinary shares ("Naspers Shares")
       on the Naspers securities register on the Unbundling Record Date and Time will
       be transferred one Unbundled MultiChoice Share for every one "N" ordinary
       share held and one Unbundled MultiChoice Share for every five "A" ordinary
       shares held. With effect from the Unbundling Operative Date (expected to
       be 09:00 on Monday, 4 March 2019), the Unbundling will be implemented and
       beneficial ownership in the Unbundled MultiChoice Shares will pass to Naspers
       shareholders.

       The transfer of Unbundled MultiChoice Shares to Naspers shareholders
       holding "A" ordinary shares could result in fractional entitlements for such
       shareholders. For more detail on the treatment of fractional entitlements,
       please see paragraph 6.2 below.

   6.2 Fractional entitlements, Cash Proceeds and Applicable Rate
       In accordance with the JSE Listings Requirements, fractional entitlements
       will be rounded down to the nearest whole number and the aggregated excess
       fractions of the Unbundled MultiChoice Shares to which a Naspers shareholder
       holding "A" ordinary shares on the Unbundling Record Date and Time would
       otherwise be entitled will not be transferred to them following the Unbundling,
       but will instead be sold on their behalf in the market as soon as practicable
       after the Unbundling. Fractional entitlements will only be paid to Naspers
       shareholders holding "A" ordinary shares.

       The cash proceeds of the sale of fractional entitlements payable to Naspers
       shareholders holding "A" ordinary shares in respect of MultiChoice Shares
       ("Cash Proceeds") will be paid net of any applicable taxes or costs.
       Accordingly, to the extent that any shareholder is in doubt of his or her
       tax position, such shareholder should consult an appropriate independent
       professional adviser.

       The Cash Proceeds will be determined with reference to the volume weighted
       average price in South African Rand of a MultiChoice Share traded on the JSE
       on the first JSE trading day (expected to be Wednesday, 27 February 2019)
       after the last day to trade in the Naspers Shares in order to participate in
       the Unbundling (expected to be Tuesday, 26 February 2019) ("LDT Date")
       discounted by 10%.

       The basis for the Cash Proceeds will be announced by Naspers on SENS two
       JSE trading days after the LDT (expected to be Thursday, 28 February 2019).

   6.3 Expected timetable of principal events
       The following indicative timetable sets out expected dates for the
       implementation of the Unbundling and the Listing.1

       Event                                                       Time and/or date(2)
       
       Publication of this announcement and
       declaration information                                 Monday, 21 January 2019
       Pre-listing Statement and Abridged Pre-listing
       Statement published on SENS                             Monday, 21 January 2019
       Finalisation announcement expected to be
       released on SENS                                      Tuesday, 19 February 2019
       Last day to trade in order to participate in the
       Unbundling(3)                                         Tuesday, 26 February 2019
       Admission to listing and trading of MultiChoice
       Shares on the JSE from commencement of trade
       (MCG ISIN ZAE000265971)                             Wednesday, 27 February 2019
       Naspers Shares trade "ex" entitlement to
       receive the Unbundled MultiChoice Shares            Wednesday, 27 February 2019
       Announcement to be released on SENS on the                          By 11:00 on
       fractional Cash Proceeds of "A" ordinary shares(4)   Thursday, 28 February 2019
       The ratio apportionment of expenditure and
       market value in respect of "N" ordinary shares
       for the Unbundling released on SENS                  Thursday, 28 February 2019
       Unbundling Record Date and Time (both in
       respect of Naspers shareholders and Naspers
       ADS holders)                                      17:00 on Friday, 1 March 2019
       Unbundling Operative Date                         09:00 on Monday, 4 March 2019
       Naspers shareholders' accounts at Central
       Securities Depositary Participants and/or
       brokers expected to be updated and credited
       with Unbundled MultiChoice Shares                          Monday, 4 March 2019
       Despatch of share certificates for MultiChoice
       Shares to Naspers shareholders                             Monday, 4 March 2019
       Bank of New York Mellon, as depositary, expects
       to receive credit of Unbundled MultiChoice
       Shares at their custodian banks in South Africa
       for proportion allocated to ADS and to issue
       ADSs to holders of Naspers ADSs                            Monday, 4 March 2019

       Notes:
       (1) The expected dates and times listed above may be subject to change. Any material changes will
           be announced on SENS.
       (2) All references to times are to South African standard time, unless otherwise stated.
       (3) There will be no dematerialisation or rematerialisation of "N" ordinary shares from Wednesday,
           27 February 2019 up to and including Friday, 1 March 2019.
       (4) The Unbundling will result in certain holders of "A" ordinary shares being entitled to fractions
           of Shares. Any fractional entitlements to Shares which holders of "A" ordinary shares are
           entitled to will be dealt with in accordance with the Naspers Announcement.

      Shareholders should anticipate their holdings of Naspers Shares on the
      Unbundling Record Date and Time by taking into account all unsettled trades
      concluded on or before the LDT Date to participate in the Unbundling which is
      due to be settled on the Unbundling Record Date and Time.

  6.4 Trading and settlement
      Naspers shareholders who hold their Naspers shares in certificated form,
      ("Certificated Naspers Shareholders") will be issued their respective
      Unbundled MultiChoice Shares in certificated form. Pursuant to the
      Unbundling, share certificates will be posted, at the risk of the Certificated
      Naspers Shareholders, by registered post in South Africa on about the first
      business day after the Unbundling Record Date ("Operative Date") to the
      addresses reflected in the securities register of Naspers on the Unbundling
      Record Date.
     
      Such Certificated Naspers Shareholders are advised that they will have
      to dematerialise the Unbundled MultiChoice Shares received by them in
      certificated form prior to trading in such MultiChoice Shares on the JSE.
      Naspers Shareholders who hold their Naspers Shares in dematerialised form
      ("Dematerialised Naspers Shareholders") will have their accounts at their
      CSDP or broker updated on the Operative Date with the relevant Unbundled
      MultiChoice Shares pursuant to the Unbundling.
     
      Documents of title in respect of Naspers Shares ("Documents of Title") are
      not required to be surrendered in order to receive the Unbundled MultiChoice
      Shares.
     
      To the extent that Certificated Naspers Shareholders wish to receive their
      Unbundled MultiChoice Shares in dematerialised form, those Naspers
      shareholders should contact Link Market Services Proprietary Limited
      ("Transfer Secretaries") directly.

  6.5 Approvals
      Naspers shareholder approval is not required for the Unbundling under the
      Companies Act and the JSE Listings Requirements.
      
      Naspers has obtained approval from the South African Reserve Bank for the
      Unbundling and the Listing.
     
      The JSE has approved the admission of the entire issued share capital of
      MultiChoice in the "5553 - Broadcasting and Entertainment" sector of the
      main board of the JSE under the abbreviated name "MC Group" and share
      code "MCG" with effect from the commencement of trading on Wednesday,
      27 February 2019.
     
      As set out in the Pre-listing Statement, pursuant to a provision of the MultiChoice
      memorandum of incorporation, MultiChoice is permitted to reduce the voting
      rights of shares in MultiChoice (including MultiChoice Shares deposited in terms
      of the ADS facility) so that the aggregate voting power of MultiChoice Shares
      that are presumptively owned or held by foreigners to South Africa (as envisaged
      in the MultiChoice memorandum of incorporation) will not exceed 20% of the
      total voting power in MultiChoice. This is to ensure compliance with certain
      statutory requirements applicable in South Africa. For this purpose, MultiChoice
      will presume in particular that all MultiChoice Shares deposited in terms of
      the MultiChoice ADS facility are owned or held by foreigners to South Africa,
      regardless of the actual nationality of the MultiChoice ADS holder. For further
      information in relation to the variable voting structure in place in respect of
      MultiChoice, please refer to the Pre-listing Statement.

7. PRO FORMA FINANCIAL EFFECTS OF THE UNBUNDLING
   The table below sets out the pro forma financial effects of the Unbundling.
   Based on Naspers's consolidated interim results for the period ended
   30 September 2018, the pro forma financial effects of the Unbundling on the earnings
   per share ("EPS"), diluted EPS, headline earnings per share ("HEPS"), diluted
   HEPS, core HEPS, net asset value ("NAV") and tangible NAV ("TNAV") of the
   Naspers Group are set out below.
   
   These financial effects are prepared for illustrative purposes only to assist
   shareholders to assess the impact of the Unbundling and, because of their nature,
   may not give a fair presentation of the effect of the Unbundling on Naspers's results
   of operations.
   
   The summarised pro forma financial effects have been prepared in a manner
   consistent in all respects with International Financial Reporting Standards
   ("IFRS"), the accounting policies adopted by Naspers as at 30 September 2018 and
   the JSE Listings Requirements. The summarised pro forma financial effects have
   not been audited, or reported on, by Naspers's auditors or reporting accountants.
   The pro forma financial effects are the responsibility of the Board. The material
   assumptions used in the preparation of the pro forma financial effects are set out in
   the notes following the table below.
                                                                Period ended
                                                             30 September 2018
                                                          Prior to           Post
   Per "N" ordinary share                               Unbundling     Unbundling
   
                                                         Unaudited      Pro forma
   EPS (US cents)                                              792            788
   Diluted EPS (US cents)                                      783            779
   HEPS (US cents)                                             640            636
   Diluted HEPS (US cents)                                     632            627
   Core HEPS (US cents)                                        385            362
   NAV (US cents)                                            6 208          6 113
   TNAV (US cents)                                           5 435          5 413
   Issued share capital ('000)                             438 656        438 656
   Issued share capital net of treasury shares ('000)      431 943        431 943
   Weighted average number of shares in issue ('000)       432 126        432 126
   Diluted weighted average number of shares in
   issue ('000)                                            433 522        433 522

8. EXCHANGE CONTROL REGULATIONS
   The Unbundled MultiChoice Shares are not freely transferable from the common
   monetary area and must be dealt with in terms of the South African Exchange Control
   Regulations, 1961 (as amended) ("Exchange Control Regulations"). The following
   summary of the Exchange Control Regulations is intended as a guide only and is not a
   comprehensive statement of the Exchange Control Regulations or advice. Shareholders
   who are in any doubt regarding the Exchange Control Regulations should contact their
   own professional advisers. This summary is based on the laws and regulations as in
   force and as applied in practice as at the date hereof and is subject to changes to those
   laws and regulations and practices subsequent to such date.
 
 8.1  Emigrants from the Common Monetary Area consisting of South
      Africa, the Republic of Namibia and the Kingdoms of Lesotho and
      eSwatini ("CMA")

      Any share certificates that may be issued by MultiChoice to emigrants from
      the CMA will be endorsed "non-resident" in accordance with the Exchange
      Control Regulations.

      Uncertificated, Unbundled MultiChoice Shares and/or securities will be
      credited directly to the emigrants' respective emigrant share accounts at
      the CSDP or broker controlling their remaining portfolios and an appropriate
      electronic entry will be made in the relevant register reflecting a "non-resident"
      endorsement. The CSDP or broker will ensure that the emigrant adheres to the
      Exchange Control Regulations.

      Any Unbundled MultiChoice Shares and/or securities issued in certificated
      form, cash dividends and residual cash payments based on emigrants'
      Unbundled MultiChoice Shares and/or securities controlled in terms of the
      Exchange Control Regulations will be forwarded to the authorised dealer in
      foreign exchange controlling their remaining assets.

  8.2 Residents outside of the CMA
      Any share certificates that may be issued by MultiChoice to non-residents of
      the CMA will be endorsed "non-resident" in accordance with the Exchange
      Control Regulations.

      Uncertificated Unbundled MultiChoice Shares and/or securities will be
      credited directly to the non-resident's non-resident share accounts at the
      CSDP or broker controlling their portfolios and an appropriate electronic entry
      will be made in the relevant register reflecting a "non-resident" endorsement.
      The CSDP or broker will ensure that the non-resident adheres to the Exchange
      Control Regulations.

      Cash dividends and residual cash payments due to non-residents are freely
      transferable from South Africa, subject to being converted into a currency
      other than Rand or paid for the credit of a non-resident Rand account.

9. TAXATION
   The following summary describes certain tax consequences in connection with the
   Unbundling. This summary is based on the laws as in force and as applied in practice
   as at the date hereof and is subject to changes to those laws and practices subsequent
   to such date. In the case of persons who are non-residents of South Africa for income
   tax purposes, this summary should be read in conjunction with the provisions of any
   applicable double tax agreement between South Africa and their country of residence.
   Naspers has not attempted to qualify the Unbundling as a tax-free transaction to
   Naspers shareholders in terms of the rule of any jurisdiction other than South Africa.
   Accordingly, the Unbundling of the Unbundled MultiChoice Shares may constitute
   a taxable transaction in any such jurisdiction. Non-resident Naspers shareholders
   are advised to consult their professional advisers regarding the tax treatment of
   the Unbundling in light of the tax laws in their respective jurisdictions and double
   taxation agreements concluded between South Africa and their countries of tax
   residence. The summary is intended as a general guide only and is not comprehensive
   or determinative and should not be regarded as tax advice. Accordingly, if you are in
   any doubt about your tax position you should consult an appropriate independent
   professional adviser.
 
   The Unbundling will constitute a disposal by Naspers of all of the Unbundled
   MultiChoice Shares to the Naspers shareholders. It is the intention that the disposal
   will be effected utilising the tax concessions provided for in section 46 of the
   Income Tax Act. The concessions provided for in section 46 of the Income Tax Act are
   outlined below:

   Disposal of Unbundled MultiChoice Shares by Naspers
   The distribution of Unbundled MultiChoice Shares by Naspers, in terms of the
   Unbundling, will be disregarded by Naspers in determining its taxable income or
   assessed loss in the tax year that the Unbundling takes place. On the basis that
   Naspers holds the Unbundled MultiChoice Shares as capital assets, the Unbundling
   should not attract capital gains tax as levied in terms of the Eighth Schedule of the
   Income Tax Act ("CGT").

   Dividends tax and returns of capital
   In terms of sections 46(5) and 46(5A) of the Income Tax Act, the distribution of the
   Unbundled MultiChoice Shares must be disregarded in determining any liability for
   dividends tax and must also not be treated as a return of capital for the purposes of
   paragraph 76B of the Eighth Schedule to the Income Tax Act.

   Naspers Shares held as trading stock
   Any Naspers shareholder holding Naspers Shares as trading stock will be deemed
   to acquire the Unbundled MultiChoice Shares as trading stock. The combined
   expenditure (for the purposes of income tax) of such Naspers Shares and
   Unbundled MultiChoice Shares will be the amount originally taken into account
   by the Naspers shareholder prior to the Unbundling in respect of those Naspers
   Shares, as contemplated in section 11(a), section 22(1), or section 22(2) of the
   Income Tax Act.

   The original expenditure incurred in respect of the "N" ordinary shares will be
   apportioned between the Unbundled MultiChoice Shares and the "N" ordinary
   shares by applying the ratio that the market value of Unbundled MultiChoice
   Shares bears to the sum of the market value of the Unbundled MultiChoice Shares
   and the "N" ordinary shares at the end of the day after the LDT Date, being
   determined with reference to Naspers and MultiChoice closing share prices on the
   first business day after the LDT Date. Naspers will advise Naspers holders of "N"
   ordinary shares of the specified ratio by way of an announcement to be released
   on SENS on the second business day after the LDT Date. This ratio must be used
   in the determination of any profits or losses derived on any future disposals of the
   Unbundled MultiChoice Shares or Naspers Shares.
   
   The expenditure so allocated to the Unbundled MultiChoice Shares will reduce the
   expenditure of the Naspers Shares held, thus allocating the expenditure between
   the Naspers Shares and the Unbundled MultiChoice Shares.

   Naspers Shares held as capital assets
   Any Naspers shareholder holding Naspers Shares as capital assets will be deemed
   to acquire the Unbundled MultiChoice Shares as capital assets. The original
   expenditure incurred prior to the Unbundling in respect of the Naspers Shares, that
   is allowable in terms of paragraph 20 of the Eighth Schedule to the Income Tax Act,
   and (where applicable) the CGT valuation of the Naspers Shares, as contemplated
   in paragraph 29 of the Eighth Schedule to the Income Tax Act, will be apportioned
   between the Unbundled MultiChoice Shares and the Naspers Shares by applying
   the ratio that the market value of Unbundled MultiChoice Shares bears to the sum
   of the market values of the Unbundled MultiChoice Shares and Naspers Shares in
   relation to the "N" ordinary shares at the end of the day after the LDT Date, being
   determined with reference to Naspers and MultiChoice closing share prices on the
   first business day after the LDT Date.
   
   Naspers will advise Naspers holders of "N" ordinary shares of the specified ratio
   by way of an announcement to be released on SENS on the second business day
   after the LDT Date. This ratio must be used in the determination of the capital gain
   or loss derived on any future disposals of the Unbundled MultiChoice Shares or
   Naspers Shares.
   
   The expenditure (and CGT valuation, where applicable) so allocated to the
   Unbundled MultiChoice Shares will reduce the expenditure (and CGT valuation,
   where applicable) of the Naspers Shares held, thus allocating this cost history
   between the Naspers Shares and the Unbundled MultiChoice Shares.
   
   Naspers shareholders will be deemed to have acquired the Unbundled MultiChoice
   Shares on the date on which the Naspers Shares were originally acquired.

10. OVERSEAS SHAREHOLDERS
    The following summary describes the restrictions applicable to Naspers shareholders
    in terms of the Unbundling who have registered addresses outside South Africa
    and/or who are nationals, citizens or residents of countries other than South Africa
    ("Overseas Shareholders") or who are persons (including, without limitation,
    custodians, nominees and trustees) who have a contractual or legal obligation to
    forward this announcement to a jurisdiction outside South Africa, or who hold Naspers
    Shares for the account or benefit of any such Overseas Shareholder and will therefore
    hold MultiChoice Shares in a similar manner and hence may have an impact on
    shareholders.
    
    The Unbundling will be implemented as a pro rata distribution in specie for no
    consideration to all Naspers shareholders recorded as such in the register of
    Naspers on the Unbundling Record Date and Time.
   
    The distribution of Unbundled MultiChoice Shares to Overseas Shareholders
    in terms of the Unbundling may be affected by the laws of such Overseas
    Shareholders' relevant jurisdiction. Overseas Shareholders should consult their
    professional advisers as to whether they require any governmental or other consent
    or need to observe any other laws, requirements or formalities to receive or access
    this announcement and/or enable them to take up their entitlements and/or have
    Unbundled MultiChoice Shares transferred to them in terms of the Unbundling.
  
    It is the responsibility of any Overseas Shareholder (including, without limitation,
    nominees, agents and trustees for such persons) being notified by this
    announcement of the Unbundling and wishing to take up their entitlement to
    Unbundled MultiChoice Shares and/or have Unbundled MultiChoice Shares
    transferred to them in terms of the Unbundling to satisfy themselves as to the
    full observance of the applicable laws of any relevant territory, including obtaining
    any requisite governmental or other consents, observing any other requisite laws,
    requirements or formalities and paying any issue, transfer or other taxes due in
    such territories.
   
    Accordingly, persons (including, without limitation, nominees, agents and trustees)
    being notified in terms of this SENS announcement should not distribute or send
    the same to any person in, or citizen or resident of, or otherwise into any jurisdiction
    where to do so would or might contravene applicable law or regulation including
    local securities laws or regulations. Any person who does distribute this SENS
    announcement into any such territory (whether under a contractual or legal
    obligation or otherwise) should draw the recipient's attention to the contents of
    this paragraph.
  
    Naspers reserves the right, but shall not be obliged, to treat as invalid any
    distribution or transfer of Unbundled MultiChoice Shares in terms of the
    Unbundling, which appears to Naspers or its agents to have been executed, effected
    or dispatched in a manner which may involve a breach of the securities laws or
    regulations of any jurisdiction; or if Naspers believes (in its discretion) or its agents
    believe that the same may violate applicable legal or regulatory requirements;
    or if Naspers believes (in its discretion) that it is prohibited or unduly onerous or
    impractical to distribute or transfer the Unbundled MultiChoice Shares to such
    Overseas Shareholder in terms of the Unbundling.
   
    If an Overseas Shareholder is of the view that the distribution or transfer of
    Unbundled MultiChoice Shares in terms of the Unbundling to such Overseas
    Shareholder may involve a breach of the securities laws or regulations or violate
    applicable legal or regulatory requirements; such Overseas Shareholder must as
    soon as reasonably practicable notify Naspers of such fact or circumstance.
    Naspers shall be entitled (in its discretion), including in either of the aforementioned
    instances, to do all things necessary or desirable to ensure compliance with
    applicable law and/or regulation including selling Unbundled MultiChoice Shares
    that would otherwise have been transferred to the Overseas Shareholder under the
    Unbundling on their behalf and at their risk, with the net proceeds of such sale (after
    deduction of any applicable taxes, withholdings or costs) to be paid to the Overseas
    Shareholder. In this regard, the Unbundled MultiChoice Shares may be aggregated
    and disposed of on the JSE in an orderly manner by the Transfer Secretaries on
    behalf of and for the benefit of such Overseas Shareholders as soon as is reasonably
    practical after the implementation of the Unbundling at the best price that can
    reasonably be obtained at the time of sale.

11. ADS FACILITY
    Naspers has an ADS programme managed by Bank of New York Mellon as
    depository. MultiChoice expects to establish an ADS facility in the United States
    of America. Bank of New York Mellon, as depositary for the MultiChoice ADS
    facility, will deliver the MultiChoice ADSs. Each MultiChoice ADS will represent
    an ownership interest in MultiChoice Shares and a pro rata share of any other
    securities, cash or other property that may be held by the depositary, under the
    terms of the deposit agreement to be entered into between MultiChoice, the
    depositary and the registered holders, indirect holders and beneficial owners of the
    MultiChoice ADSs from time to time.

    Following implementation of the Unbundling, holders of the Naspers ADSs at
    the Unbundling Record Date and Time will be issued on the Operative Date with
    MultiChoice ADSs in respect of their entitlement to Unbundled MultiChoice Shares
    in terms of the Unbundling.

    On the Unbundling Operative Date, the MultiChoice Shares will not be listed on
    any securities exchange in the United States of America, and MultiChoice expects
    to rely on an exemption from registration under the US Securities Exchange Act of
    1934 (as amended) provided by Rule 12g3-2(b) thereunder.

    MultiChoice will not treat MultiChoice ADS holders as its shareholders and,
    accordingly, MultiChoice ADS holders will not have shareholders' rights, which are
    governed by South African law. The ADS holders' rights will be governed by the
    deposit agreement, which will be governed by the laws of the State of New York. The
    deposit agreement will also set out the rights and obligations of the depositary.
    
    The depositary or its nominee will be the record holder of the MultiChoice Shares
    underlying the ADSs and, therefore, ADS holders must rely on the depositary to
    exercise shareholder rights on their behalf. ADS holders may exercise their voting
    rights with respect to the MultiChoice Shares underlying the ADSs in accordance
    with the provisions of the deposit agreement. The depositary will not itself exercise
    any voting discretion in respect of the MultiChoice Shares. Upon receipt of
    instructions from an ADS holder pursuant to the deposit agreement, if MultiChoice
    asked the depositary to solicit voting instructions, the depositary is required to
    endeavour (insofar as practicable and permitted under MultiChoice's memorandum
    of incorporation) to vote or cause to be voted the MultiChoice Shares represented
    by the ADSs in accordance with such instructions. If MultiChoice did not request
    the depository to solicit voting instructions, ADS holders can still give voting
    instructions and the depository may, but is not required to, endeavour to carry out
    those instructions.

    ADS holders will be required to pay fees under the terms of the deposit agreement,
    including fees for cancellation of ADSs and upon dividends and distributions. The
    depositary has agreed to reimburse MultiChoice for certain reasonably incurred
    expenses directly related to the ADS facility.
  
    ADS holders should read the entire deposit agreement and the form of the
    depositary receipt. A copy of the deposit agreement will be filed as an exhibit to the
    registration statement on Form F-6 to be filed by or on behalf of MultiChoice with
    the US Securities Exchange Commission. ADS holders may find the registration
    statement and the deposit agreement on the US Securities Exchange Commission's
    website at http://www.sec.gov.
  
    For further information on the ADS Facility, please refer to the Pre-listing Statement.
  
    The Pre-listing Statement
    A Pre-listing Statement containing information on MultiChoice and the Listing was
    issued by MultiChoice today and can be accessed on Naspers's website at
    https://www.naspers.com/ and MultiChoice's website at www.multichoice.com.

    About Naspers
    Founded in 1915, Naspers is a global internet and entertainment group and one of
    the largest technology investors in the world. Operating in more than 120 countries
    and markets with long-term growth potential, Naspers builds leading companies
    that empower people and enrich communities. It runs some of the world's leading
    platforms in internet, video entertainment and media.
    
    Naspers companies connect people to each other and the wider world, help people
    improve their daily lives, and entertain audiences with the best of local and global
    content. Every day, millions of people use the products and services of companies
    that Naspers has invested in, acquired or built, including Avito, Brainly, BYJU'S,
    Codecademy, eMAG, Honor, ibibo, iFood, letgo, Media24, Movile, MultiChoice, OLX,
    PayU, Showmax, SimilarWeb, Swiggy, Takealot, Udemy and WeBuyCars.
    
    Similarly, hundreds of millions of people have made the platforms of its associates a
    part of their daily lives: Tencent (www.tencent.com; SEHK 00700), Mail.ru 
    (www.corp.mail.ru; LSE: MAIL), MakeMyTrip Limited (www.makemytrip.com;
    NASDAQ:MMYT) and DeliveryHero (www.deliveryhero.com; Xetra: DHER).
    Naspers has a primary listing on the Johannesburg Stock Exchange (NPN.SJ) and a
    secondary listing on the A2X Exchange (NPN.AJ) in South Africa, and has an ADS
    listing on the London Stock Exchange (LSE: NPSN).
    
    For more information, please visit www.naspers.com.

    Disclaimer
    The release, publication or distribution of this announcement in jurisdictions other than South
    Africa may be restricted by law and therefore persons into whose possession this announcement
    may come should inform themselves about, and observe, any such applicable restrictions or
    requirements. Any failure to comply with such restrictions or requirements may constitute a violation
    of the securities laws and regulations of any such jurisdiction. To the fullest extent permitted by
    applicable law, Naspers disclaims any responsibility or liability for the violation of such restrictions
    or requirements by any person. This announcement has been prepared for the purposes of complying
    with the JSE Listings Requirements and the information disclosed may not be the same as that which
    would have been disclosed if this announcement had been prepared in accordance with the laws and
    regulations of any jurisdiction outside of those outlined above.

    This announcement does not constitute an offer or form part of any offer or invitation to purchase,
    subscribe for, sell or issue, or a solicitation of any offer to purchase, subscribe for, sell or issue,
    any securities including Unbundled MultiChoice Shares (whether pursuant to this announcement
    or otherwise) in any jurisdiction, including an offer to the public or section of the public in any
    jurisdiction. This announcement does not comprise a prospectus or a prospectus equivalent
    announcement, nor does it constitute an advertisement of an offer as envisaged in the Companies Act.
    This announcement may include forward-looking statements including those about the Naspers Group,
    the MultiChoice Group, their prospects and/or the Unbundling and/or the Listing, which are based
    on current expectations and projections about future events. These statements may include, without
    limitation, any statements preceded by, followed by or including words such as "target", "believe",
    "expect", "aim", "intend", "may", "anticipate", "estimate", "plan", "project", "will", "can have", "likely",
    "should", "would", "could" and other words and terms of similar meaning or the negative thereof.
    These forward-looking statements are subject to risks, uncertainties and assumptions including about
    the Naspers Group, the MultiChoice Group, the Unbundling and the Listing. In light of these risks,
    uncertainties and assumptions, the events in the forward-looking statements may not occur or occur
    in the manner suggested by the forward-looking statement. No representation or warranty is made
    that any forward-looking statement will come to pass and, in particular, no representation or warranty
    is made that the Unbundling or the Listing will be implemented (either wholly or in part). No one
    undertakes to publicly update or revise any such forward-looking statement. The information contained
    in this announcement is provided as at the date of this announcement and is subject to change without
    notice. Naspers and the MultiChoice Group expressly disclaims any obligation or undertaking to
    disseminate any updates or revisions to any forward-looking statements contained herein to reflect any
    change in its expectations with regard thereto or any change in events, conditions or circumstances on
    which any of such statements are based.

    Cape Town
    21 January 2019

Sponsor
INVESTEC SPECIALIST BANK

Joint Financial Adviser to Naspers
CITI

Joint Financial Adviser to Naspers
MORGAN STANLEY

South African legal adviser to Naspers and the Company
WEBBER WENTZEL

www.naspers.com

Date: 21/01/2019 05:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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