Naspers made noise earlier this year signaling its plans to get rid of MultiChoice and its pay-TV division in the form of a separate stock market listing since it no longer offer as much value and more importantly as much growth potential as Naspers' main investment focus that is its internet business component.
By spinning out and essentially "unbundling" its video entertainment division, MultiChoice - that is profitable - helps to reduce the overall size of Naspers.
"This marks a significant step for the Naspers Group as we continue our evolution into a global consumer internet company," says Bob van Dijk, Naspers CEO, in a statement.
Imtiaz Patel, Naspers video entertainment CEO, says "Listing and unbundling MultiChoice Group is intended to create a leading entertainment business listed on the JSE that is profitable and cash generative. We offer an unmatched selection of local and original content, as well as a world-class sports offering."
"Our leadership team is diverse, experienced and well-positioned to take the company forward. I am particularly pleased that this transaction will further enhance the value for Phuthuma Nathi shareholders."
"There are significant growth opportunities for MultiChoice Group in Africa. The combination of MultiChoice’s reach, Showmax and DStv Now's cutting-edge internet television service, alongside Irdeto’s 360 security suite will provide a unique offering."
Naspers says its video entertainment business is one of the fastest growing pay-TV operators globally and thatits multi-platform business reaches 13.5 million households across Africa.
"In the last financial year, the business added 1.5 million subscribers, and generated revenue of R47.1 billion and trading profit of R6.1 billion. It 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."
Naspers says the MultiChoice Group is expected to be unbundled "with limited leverage", "providing it with the necessary financial flexibility to pursue growth opportunities in African video entertainment".
"The business is also positioning itself for the future by offering online streaming services, including Showmax and DStv Now".
Naspers will retain its primary listing on the JSE as well as its interests in Media24. MultiChoice Group is anticipated to list on the JSE and simultaneously unbundle in the first half of 2019, subject to the approval of the requisite regulatory authorities.
