There are more than 25 million households across the continent yet to be
captured by its traditional pay-TV business. FILE PHOTO | NMG
Africa’s biggest pay-TV group MultiChoice debuted on the
Johannesburg Stock Exchange (JSE) on Wednesday with shares opening at
95.50 rand, giving the company a market capitalisation of 42 billion
rand ($3.03 billion).
South African e-commerce giant
Naspers decided to spin off MultiChoice after coming under pressure in
recent years to find ways to narrow a valuation discount between its
market value and that of its one-third stake in Chinese internet group
Tencent.
As of 0727 GMT, the stock was trading at
105.04 rand, adding to opening gains. 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.
The company has said there are
more than 25 million households across the continent yet to be captured
by its traditional pay-TV business.
The spin off leaves
MultiChoice — whose strong cash flow helped Naspers evolve into one of
the 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.
“This is a
momentous time for our business... This marks the next chapter in our
development and growth,” said MultiChoice CEO Calvo Mawela.
MultiChoice’s Kenya unit had indicated last year that plans to list its
video entertainment business on the JSE would not affect its local
operations.
“There is no impact on the Kenyan business
operations. At this point in time, the business is focusing on bedding
down its listing and simultaneous unbundling of MultiChoice Group from
the Naspers Group,” said MultiChoice Kenya corporate affairs manager
Philip Wahome.
“We currently do not have any plans to explore other listings outside the JSE.”
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