Acquisition

RNS Number : 2891P

Naspers Limited

14 July 2010

 

NASPERS LIMITED

(Incorporated in the Republic of South Africa)

(Registration number 1925/001431/06)

JSE share code: NPN ISIN: ZAE000015889

LSE ADS code: NPSN ISIN: US 6315121003

("Naspers" or "the company")

 

ACQUISITION OF 28,7% ECONOMIC INTEREST

IN DIGITAL SKY TECHNOLOGIES

 

1. INTRODUCTION

Shareholders are advised that a subsidiary of Myriad

International Holdings B.V. ("MIH"), an indirect wholly

owned subsidiary of Naspers, has entered into agreements

regarding its interest in Mail.ru, the leading Russian

internet communication and gaming company. MIH will

exchange its 39,3% stake in Mail.ru and invest a further

US$388m (R2,9bn) cash to obtain a 28,7% economic interest

in Digital Sky Technologies Limited ("DST") (the

"transaction").

 

DST is one of the largest internet companies in the

Russian-speaking market. Upon the close of this

transaction, DST will own more than 99,9% of Mail.ru, the

leading Russian internet communication and gaming company.

DST owns ICQ, the leading instant messaging platform in

Russian-speaking markets, and also holds: more than 75% of

Forticom, the social network operator in Russia and the

Baltics; minority stakes in vKontakte, the Russian social

network service, and OE, a payments platform; as well as

small interests in global internet companies such as

Facebook, the largest social network, Zynga, the largest

provider of social games, and Groupon, a fast growing

social e-commerce business.

 

This transaction provides MIH with a significant stake in

a leading internet group with growth potential in Russia

and deep understanding of this market. It also aligns

MIH's interests with those of other shareholders of DST.

2. CONSIDERATION

The consideration payable by MIH includes the contribution

of its existing stake in Mail.ru, an investment of US$50m

for new shares to be issued by DST and a further US$338m

by MIH to acquire further shares in DST from current

shareholders.

 

3. FINANCIAL EFFECTS

The table below sets out the unaudited pro forma financial

effects of the transaction and is based on the published,

audited results of Naspers for the year ended 31 March

2010.

 

The unaudited pro forma financial effects, for which the

Naspers board is responsible, are presented for

illustrative purposes only and may not give a fair

reflection of the financial position and results of the

operations post the implementation of the transaction.

Before After

transaction (a) transaction (b) Change

Per share (cents) (cents) (%)

EPS

EPS (cents) 873 1 260 44

Headline EPS (cents) 884 843 (5)

Fully diluted EPS

EPS (cents) 848 1 225 44

Headline EPS (cents) 859 820 (5)

Core Headline EPS (cents) 1 426 1 386 (3)

NAV (cents) 8 993 9 346 4

NTAV (cents) 3 342 3 695 11

Net number of shares in

issue ('000) 374 308 374 308 -

Weighted average number of

shares in issue ('000) 372 951 372 951 -

Fully diluted weighted

average number of shares

in issue ('000) 383 820 383 820 -

 

Assumptions

(a) The information "Before transaction" is based on the

published audited results of Naspers for the year ended 31

March 2010.

 

(b) The information "After transaction" is based on the

following assumptions:

 

(i) the transaction was effective from 1 April 2009;

 

(ii) the total purchase consideration for the 28,7% stake

in DST included cash of US$388m plus the group's 39,3%

stake in Mail.ru;

 

(iii) cash paid was drawn down from the group's existing

credit facilities bearing interest at an average pre-tax

rate of 5,5%;

 

(iv) no tax effect was assumed on the transaction;

 

(v) income statement information was converted at

R7,7123:US$1, being the average rate for the year ended 31

March 2010;

 

(vi) balance sheet information was converted at

R7,3343:US$1, being the closing rate on 31 March 2010; and

 

(vii) the dilution gain of R1,3bn was calculated based on

the net book value of Mail.ru as at 31 March 2010.

 

(c) The NAV and NTAV per ordinary share "After

transaction" is based on the assumption that the

transaction was implemented on 31 March 2010.

 

(d) The pro forma financial effects do not include the

impact of any purchase accounting adjustments.

 

Shareholders are advised that the board believes core

headline earnings per share to be an appropriate indicator

of sustainable earnings performance. For a definition of

`core headline earnings' we refer shareholders to the

annual financial statements and to our website

(www.naspers.com).

 

4. EFFECTIVE DATE AND CONDITIONS PRECEDENT

The effective date of the transaction will be on

fulfilment of the conditions precedent, which include,

inter alia, approvals of various regulatory authorities.

 

5. CATEGORY OF TRANSACTION

The transaction has been categorised as a category 2

transaction in terms of section 9.5(a) of the JSE Limited

Listings Requirements.

 

Cape Town

14 July 2010

 

Important information:

The report contains forward-looking statements as defined

in the United States Private Securities Litigation Reform

Act of 1995. Words such as "believe", "anticipate",

"intend", "seek", "will", "plan", "could", "may",

"endeavour" and similar expressions are intended to

identify such forward-looking statements, but are not the

exclusive means of identifying such statements. While

these forward-looking statements represent our judgements

and future expectations, a number of risks, uncertainties

and other important factors could cause actual

developments and results to differ materially from our

expectations. These include factors that could adversely

affect our businesses and financial performance. We are

not under any obligation to (and expressly disclaim any

such obligation to) update or alter our forward-looking

statements, whether as a result of new information, future

events or otherwise. Investors are cautioned not to place

undue reliance on any forward-looking statements contained

herein.

 

About Naspers:

Naspers comprises a broad-based media group operating in

129 countries. It is listed on the JSE Limited (JSE), with

an ADR listing on the London Stock Exchange. Today its

principal operations are in internet platforms (focusing

on e-commerce, communities, content, communication and

games), pay-television and the provision of related

technologies and print media. Most of Naspers's businesses

hold leading market positions. The group's most

significant operations are located in emerging markets.

This includes South Africa and elsewhere in Africa, China,

Central and Eastern Europe, India, Latin America, Russia,

Thailand and the Netherlands.

 

Sponsor

Investec Bank Limited

(Registration number 1969/004763/06)

 

Corporate adviser

Citigroup Global

Markets Limited

 

Legal adviser

Wilmer Cutler Pickering

Hale and Dorr LLP

 

Accountants

PricewaterhouseCoopers Inc

(Registration number 1998/012055/21)

This information is provided by RNS

The company news service from the London Stock Exchange