Naspers, Africa's most valuable company, seems to be looking for an exit from pay-TV. According to the statement issued by the company, it will spin off Multichoice next year.
"Naspers today announced its intention to list its Video Entertainment business separately on the Johannesburg Stock Exchange (JSE) and simultaneously to unbundle the shares in this business to its shareholders," wrote Naspers.
The spun-off company will be known as MultiChoice Group. This will include MultiChoice South Africa, MultiChoice Africa, Showmax Africa, and Irdeto. Though Naspers will keep its primary listing on the JSE.
Bob van Dijk, the CEO, pointed out that this is a key step towards Naspers becoming an internet company. "This marks a significant step for the Naspers Group as we continue our evolution into a global consumer internet company," he said.
"Listing MultiChoice Group via unbundling aims to unlock value for Naspers shareholders and at the same time create an empowered, top 40 JSE-listed African entertainment company.”
Naspers pioneered Africa's video entertainment industry with its satellite TV service. Launched in 1995, DSTV has grown to over 50 countries in Africa.
The company pointed out that their Video Entertainment business is one of the fastest growing pay-TV operators globally. Adding that its multi-platform business entertains 13.5 million households across Africa. But, this growth might not last. As long as the like of Netflix continue to cannibalize on their existent subscribers.
In fact, one could be safe to conclude that perhaps Naspers doesn't see a future for the video entertainment service. Hence the focus on becoming an internet company.
Founded in 1915, Naspers has been very active when it comes to investments as well as exits.
In March, it announced its intentions to sell stock worth more than $10bn, equal to 2 percent of the shares in Tencent. Additionally, it sold its 11.18% stake in India's Flipkart to US retailer, Walmart for $2.2 billion in May this year. It also exited Nigeria's Konga albeit at a loss.
The company has shown where the billions it raised from exits will be going. First, by investing $500 billion in US-based Letgo through OLX Group. It also led Movile's $124 million round in July.