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Multichoice unbundling yields windfall for black investors


MultiChoice SA’s BEE investors have heartily welcomed the company’s planned separation from parent company Naspers.

The two Phuthuma Nathi share schemes, which give 90,000 black South Africans a 20% stake in MultiChoice SA, leapt as much as 26.6% on Tuesday after a 1.7% gain the day before. Nearly R7m worth of shares changed hands over the two days on the Phuthuma Nathi online trading platform.



This followed Naspers’s announcement that it would unbundle its pay-TV business onto the JSE in the first half of 2019. It will pass its interest in the DStv operator to its shareholders.

Naspers also said it would raise Phuthuma Nathi’s stake in MultiChoice’s SA business from 20% to 25% for no cost..

"It’s an unbelievable BEE story and an unbelievable commitment by Naspers to BEE in SA," Imtiaz Patel, CEO of Naspers’s video entertainment unit, told Business Day.

"I can tell you confidently that this Phuthuma Nathi scheme to date has been one of the most successful BEE schemes in the country — roughly R12bn of value has been created for Phuthuma Nathi since the inception."

Patel said the company planned to let Phuthuma Nathi investors exchange a quarter of their original shares in the entity for the newly listed MultiChoice Group shares, which would be easily tradable on the JSE.

"That’s important because we’ve consistently heard from our Phuthuma Nathi shareholders that they are seeking the ability to unlock value through having more freely tradable shares," Patel said.

MultiChoice Group will include Naspers’s local and rest-of-Africa pay-TV business along with Showmax Africa and security company Irdeto.

Patel said he was confident that MultiChoice would not succumb to competition from online rivals such as Netflix.

"It’s one of the fastest-growing pay-TV operators globally … We are in 13.5-million homes as at the end of the financial year, and the prospects for this year are looking good."

Subscriber growth

In the year ended March, MultiChoice generated revenues of R47.1bn and trading profits of R6.1bn.

"We’ve had a fantastic two-and-a-half years of subscriber growth, we have an unmatched selection of local and original content and a world-class sports offering, and we’re positioning ourselves for the future through Showmax and DStv Now, our streaming services … we’re seeing a really positive take-up of these offerings."

Naspers CEO Bob van Dijk said he was "confident about putting MultiChoice on its own legs ... I’m confident it’s a growth story".



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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