How much is MultiChoice really worth?
The market is adopting a wait-and-see attitude as MultiChoice prepares to sever its ties with Naspers
With MultiChoice preparing to go it alone, investors should be aware that companies that fly the Naspers coop sometimes have a hard landing. Take Novus Holdings, the printing group that was unbundled four years ago. Partly because of a new, less favourable printing contract with Naspers’s Media24 unit, Novus’s share price has had a torrid ride — falling from R13.25 at listing in March 2015 to just R4.30 on Monday. Needless to say, some investors are concerned that MultiChoice might face a similar fate. To the sceptics, satellite TV is a sunset industry just like print media, and Naspers is getting out at the right time. While analysts expect MultiChoice to make it relatively easily into the JSE’s top 40 index — with most valuations ranging from R50bn to R90bn — Gryphon Asset Management portfolio manager Casparus Treurnicht expects the stock to eventually slide off that important list. “In my belief, MultiChoice will eventually trade at a sub-10 p:e ratio,” says Treurnicht. Even thou...