Naspers And Prosus Announce The Intention To Remove The Cross-holding Structure
Naspers And Prosus Announce The Intention To Remove The Cross-holding Structure. The board of directors of Naspers and the board of directors of Prosus are pleased to announce that Naspers and Prosus (together with their consolidated subsidiaries, the Group) intend to implement a proposed transaction in terms of which the cross-holding structure between Naspers and Prosus will be removed (the Proposed Transaction). The implementation of the Proposed Transaction will enable the continuation of the share repurchase programme announced by the Group on 27 June 2022 at the Naspers level.
The Proposed Transaction is also intended to remove the complexity created by the Cross-Holding Structure while keeping the Naspers and Prosus Free-Float Effective Economic Interests the same as they are prior to the implementation of the Proposed Transaction. This will be achieved through aligning the legal ownership in Prosus with the current respective free-float effective economic interests.
The Proposed Transaction is intended to address: (i) the limitation on the Repurchase Programme at the Naspers level arising from the Cross-Holding Structure, and (ii) the complexity arising from the Cross-Holding Structure. The Repurchase Programme commenced on 27 June 2022 and, since inception, the Repurchase Programme has continued to create significant value for both the Naspers and Prosus shareholders and as at 31 March 2023, resulted in a c. 18% reduction in the discount to NAV at a Naspers level and c. 16% at a Prosus level, unlocking c. US$29 billion of value.
The Group expected that the introduction of the Cross-Holding Agreement would reduce the complexity that comes with a cross-holding structure and clarify the market’s understanding of the true economic interests under the Cross-Holding Structure. Since its implementation, however, the Cross-Holding Structure is widely seen as a negative by shareholders. A common shareholder view is that the Cross-Holding Structure introduces excessive complexity, contributes to the holding company discount, and should be removed.
The Naspers Board and Prosus Board believe that enabling the continuation of the Repurchase Programme at the Naspers level and removing the complexity arising from the Cross-Holding Structure, pursuant to the Proposed Transaction, will allow the Group to continue to create shareholder value.
