Naspers grows its Delivery Hero stake
The transaction pushes Naspers’s shareholding in food-ordering specialist Delivery Hero to 23.6%, making it the largest shareholder
Naspers, the technology conglomerate largely viewed as a proxy for Chinese internet business Tencent, has bolstered its e-commerce offering through a R10.5bn deal to markedly increase its stake in online food-ordering specialist Delivery Hero.
In a statement on Thursday, the Cape Town-headquartered company disclosed it had paid €660m to acquire another 22.4-million shares in Frankfurt-listed Delivery Hero from Rocket Internet.
The transaction pushes Naspers’s shareholding in Delivery Hero to 23.6%, making the group the largest shareholder in the fast-growing business.
Naspers said that the deal would be funded from existing resources and was expected to close in the first quarter of 2018.
Naspers paid Rocket an effective €29.50 a share — representing a discount of about 13% on the latest Delivery Hero share price.
The deal comes at a time when the market is fixated on the Naspers share price, largely reflecting the 34% holding in Tencent but discounting the group’s numerous international e-commerce and media ventures. If Tencent is excluded, Naspers — which holds investments and operations in e-commerce, video services and media — traded deeply in the red in its last financial year.
Ashburton Investments portfolio manager Wayne McCurrie said Delivery Hero was one of Naspers’s bigger e-commerce ventures and was clearly positioned in an area of massive growth. He said that although the investment in Delivery Hero (worth about €1.4bn, or R22bn) was dwarfed by the holding in Tencent, the deal was still a smart strategic move by Naspers.
“It may not move the needle at Naspers just yet, but in my opinion this is a very good investment.”
Delivery Hero, which listed in June, is a global online food ordering and delivery platform, which claims number one market positions — in terms of restaurants, active users, gross merchandise value or website traffic — in more countries than any of its competitors. The Berlin-based company operates in more than 40 countries and has a market capitalisation of €5.8bn (R92bn).
In a Sens statement, Naspers said that growing its position in online food ordering and delivery was consistent with its strategy to invest in platforms with global potential that offered online marketplace services in high-growth markets.
Naspers has similar investments in iFood in Latin America and Swiggy in India.
The company said that the online food-delivery sector was still underpenetrated and was growing rapidly across the world.
“Our increased investment is due to its confidence in the long-term prospects of the company,” it said.
Delivery Hero’s operational reach spans Europe, the Middle East, North Africa, Latin America and the Asia-Pacific region.
It also operates its own last-mile food delivery in more than 50 high-density urban areas around the world.