The obvious approach to the growing discount between Naspers and its investment in Tencent — which would be to unbundle the Tencent stake to Naspers shareholders — overlooks the peculiarities of the investment environment in China. If there is to be a major restructuring aimed at tackling the discount it is much more likely, given these peculiarities, that Naspers would spin off all its non-Tencent operations and hold on to the hugely valuable 33% stake in the Chinese company. Jean Pierre Verster of Fairtree Capital says he cannot see the Chinese authorities allowing a deal that might threaten the control of one of the country’s most valuable companies. "The Naspers control structure has been important from a Tencent perspective because it ensures neither Naspers nor Tencent is vulnerable to a hostile takeover," Verster says.This structure was made seemingly impregnable back in 2005 by then CEO Koos Bekker, when PSG’s Jannie Mouton launched a hostile bid for control. Bekker, who mad...
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