Extract from Portfolio Manager Commentaries – June 2023

Naspers and Prosus had recently announced a scheme to end the cross-shareholding arrangement between the two companies that resulted from the various schemes they have undertaken to eliminate the massive discount at which they trade to Tencent and other underlying assets that make up their NAV. If approved by shareholders of the two firms, the end result will be Naspers owning 43% of Prosus, and Prosus no longer having any stake in Naspers. A key longer-term driver of the Prosus share price will be the continued sale of Tencent shares by the company (which owns 27% of Tencent) with the proceeds used to buy back its own (Prosus) shares. This (unlimited) share buyback has been going for just over a year, during which time Prosus has repurchased a significant 15% of its shares in issue.

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