South African billionaire Koos Bekker’s Naspers spends $2.4 billion on share buybacks

Timilehin Adejumobi -

Key Points

  • Naspers completes R44 billion ($2.4 billion) share buyback, repurchasing 21% of shares, marking JSE’s largest buyback.
  • Koos Bekker’s strategic shift dismantles cross-shareholding with Prosus, focuses on closing valuation gap and enhancing shareholder value.
  • Funding for the buybacks came from selling 72 million Prosus shares, raising R43.59 billion ($2.39 billion).

Naspers, the leading conglomerate led by South African billionaire Koos Bekker, has completed its share buyback program, spending R44 billion ($2.4 billion) over 10 months to repurchase 21 percent of its shares. This marks the largest buyback in the history of the Johannesburg Stock Exchange (JSE).

On Thursday, the technology investment firm announced the cumulative repurchase of 13,084,582 Naspers shares, equivalent to 3 percent of its N shares in issue, from August 25, 2023, to July 3, 2024. JSE regulations require Naspers to disclose each instance it buys back 3 percent of its free float.

Funding and strategic moves

Funding for these buybacks largely came from selling shares in Amsterdam-listed Prosus. Between August and July, 72,106,625 Prosus shares were sold, generating approximately R43.59 billion $2.39 billion). This move follows the 2022 launch of the buyback program after dismantling an unpopular cross-shareholding structure with Prosus.

This structure, established in 2021 through a share swap deal, allowed Prosus to acquire just over 45 percent of Naspers, effectively relocating part of Naspers from Johannesburg to Euronext in Amsterdam. The arrangement aimed to reduce the discount between the two companies and their stake in Tencent. However, it failed to achieve this, prompting the company to start an open-ended share repurchase program.

Commitment to shareholder value

Ervin Tu, group president and chief investment officer, emphasized the buyback’s ongoing nature, stating, “Our primary focus remains on enhancing operational excellence and shareholder value. The buyback program reflects our commitment to delivering long-term value creation.” Tu further noted intentions to narrow the valuation gap persisting between Naspers and Prosus.

In June, Prosus reported a 22 percent reduction in its free float through buybacks totaling $26 billion, thereby boosting shareholder value by $32 billion through reduced discounts and increased net asset value per share. As of June 21, a combined total of 637 million Prosus shares and 42 million Naspers shares had been repurchased.

Koos Bekker’s continued impact

Naspers, a South African multinational with a global presence in internet, media, and technology, boasts a diversified portfolio spanning online retail, publishing, and venture capital, operating across five continents and serving over two billion customers.

Koos Bekker, a titan of South African business, is credited with transforming Naspers from a traditional newspaper publisher into a leading player in e-commerce and cable TV. Despite holding a relatively modest 0.85 percent stake (1,687,887 ordinary shares), Bekker’s influence on the company’s direction remains significant.