Set free by Naspers, MultiChoice plots its path

21 September 2018


Discarded by its globe-trotting parent Naspers after more than three decades, African pay-TV heavyweight MultiChoice Group is facing an uncertain future.

The broadcaster of English Premier League soccer and hit dramas such as Game of Thrones will be spun off by Naspers in Johannesburg next year, creating a newly listed company. Estimated valuations by analysts and investors have ranged from $5 billion to $6.6 billion – plus the potential for dividends – compared with zero as part of the wider Naspers empire.

Naspers shareholders receiving stock in the new company will be hoping MultiChoice can continue to find subscribers willing to pay R959 ($64.60) a month in South Africa, as streamers such as Netflix target similar customers with good broadband connections. There’s also the challenge of stabilising and improving the business in the rest of Africa, which has dragged down profit in recent years as economies struggle.

“At the right valuation, investors will want to hold MultiChoice,” Peter Takaendesa, a money manager at Mergence Investment Managers, said by phone from Cape Town. “It’s still generating cash, and the business has the potential to grow more over the next decade or so.” Read the full article on MoneyWeb here.