Africa's top pay-TV group MultiChoice jumps 15 percent on JSE debut
* Shares open at 95.5 rand, rise to 110.06 rand
* Company's market cap at $3.47 bln, top-40 firm on JSE
* But market value below some expectations
(Recasts, updates shares and market cap, adds CFO, investor
By Emma Rumney
JOHANNESBURG, Feb 27 (Reuters) - Shares in Africa's biggest
pay-TV group MultiChoice leapt around 15 percent on its market
debut on Wednesday, launching the company straight into the
top-40 firms on Johannesburg's bourse.
MultiChoice, a spin-off from ecommerce giant Naspers
, stood at 110.06 rand per share at 0957 GMT, just over
15 percent higher than its opening price of 95.5 rand, giving it
a market capitalisation of 48 billion rand ($3.47 billion).
Naspers hoped listing Multichoise would help narrow a
valuation discount between its market value and that of its
one-third stake in Chinese internet group Tencent, and
believed MultiChoice would fare better on its own.
Multichoice's market value was, however, still well below
some analysts' estimates of around $6 billion.
Claude van Cuyck, portfolio manager at Denker Capital, which
holds Napsers shares and has kept its stake in the
newly-independent MultiChoice, said the price was likely weighed
down by its losses in its business outside South Africa.
"You could understand that given the extent of the losses
there at this point that the market would be and remains fairly
sceptical until things normalise," he said, adding that there
was significant opportunity on the continent.
He added that the unbundling was the right strategy for both
Napsers and MultiChoice, which is now able to use its cash from
its lucrative South African business to invest without being
influenced by Naspers broader strategy.
For Naspers, van Cuyck said while it was unlikely to make a
significant dent in the Tencent discount it signalled the
company was focused on taking the steps required to do so.
Tim Jacobs, CFO of MultiChoice, told Reuters in an interview
that the company was pleased with the level at which its stock
"We don't think that's a bad share price at the moment.
We're in the top-40, that's really positive, and really good for
us," he said.
The spin off leaves MultiChoice - whose strong cash flow
helped Naspers evolve into one of world's biggest players in
e-commerce - free to fend for itself in an increasingly
competitive market where Netflix is already supplying viewers
with TV content and Hollywood hits.
Naspers did not raise any money from the listing, with the
439 million shares instead being distributed to current Naspers
shareholders on a one-for-one basis for its listed shares and
one for five unlisted A class shares.
Founded 30 years ago, MultiChoice reaches around 14 million
households in 50 African countries, offering both paid-TV
products and a fledging streaming service called Showmax.
It says it is one of the fastest growing pay-TV service in
the world, and that there are 25 million households across the
continent it is yet to capture.
($1 = 13.8359 rand)
(Reporting by Emma Rumney; editing by Alexandra Zavis and Jason
First Published: 2019-02-27 10:01:24
Updated 2019-02-27 13:28:43
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