Prosus has today announced that it is to invest $5 billion to acquire shares in both its own Euronext Amsterdam listed shares as well as those of parent company Naspers. Today’s press release chalks the move up to a desire to “crystalise value for shareholders” at a time when valuations of external M&A targets have not been appealing to the classifieds giant.
Having become Europe’s second-biggest tech company on listing on the stock exchange last year, Prosus had been one of the hot contenders to make a deal for eBay Classifieds back in July but was beaten to the punch by fellow European heavyweight Adevinta. Now it seems that the parent company of brands such as OLX, Property24, and Imovirtual has chosen to take some of the equity it might have used for a possible eBay deal and invest in itself.
Speaking about the decision, Prosus and Naspers CEO Bob van Dijk said: “We have found several large M&A opportunities in our sector to be fully priced and have stayed disciplined. Utilising cash to own more of our current portfolio through a purchase of our own shares – when the discount to NAV is sizeable – is a sensible use of capital”.