Naspers unlocked about R150-billion of value for shareholders through the separate listing of its Internet businesses, and with that done is now focusing on bulking up in online food deliveries.

For years, Naspers has been trying to reduce a gap between its share price and the combined value of its assets. It split off these investments, including a 31% stake in Chinese technology giant Tencent, into a new unit called Prosus, which listed its stock in Amsterdam in September. The aim of the European listing was to attract foreign investors who cannot buy into emerging-market companies.

Before the listing, Naspers’s Internet businesses were trading at a discount of about 44% to their net asset value, a gap which narrowed to about 37% as of Wednesday’s closing prices, the company said in an e-mail. That’s the equivalent to US$10-billion “of value unlock”.

Bob Van Dijk, CEO of both companies, is scouring the globe looking to replicate Naspers’s blockbuster investment in Tencent. Naspers put $34-million into the Chinese company in 2001. That investment is now worth about $126-billion. Naspers, based in Cape Town, owns about 74% of Prosus and operates newspaper businesses.

As part of that effort, he’s making a major bet on online food delivery. Through Prosus, he’s vying with Takeaway.com to acquire UK online food-delivery company Just Eat. Prosus is also backing other players in the sector, such as India’s Swiggy and iFood.

“We get to see what happens in the online food delivery business in more than 40 markets,” chief financial officer Basil Sgourdos said in an interview. The plan is to get any meal to a customer within 30 minutes and at roughly the cost of preparing it at home.

Big appetite

The firm has spent $2.5-billion in investments in the food industry, from which it is making an internal rate of return of 30%. “We want to change the way people eat every day; that requires investment in technology, logistics and food preparation from our side,” the CFO said.

Naspers on Friday reported core headline earnings from continuing operations of $3.80/share in the six months to September, up from $3.53 a year earlier. Prosus, which provided results for the first time, generated $1.05/share using the same adjusted profit measure, up 6.1% from a year earlier.

Naspers shares are up 17% year to date, giving the company a market capitalisation of about $67.9-billion. Prosus shares have slumped 16% since their September listing, valuing the Naspers unit at about $112.6-billion. — (c) 2019 Bloomberg LP