Naspers is moving to increase its issued share capital through a stock split, a move that the group hopes will make its stock cheaper and accessible to a wider set of investors.
Over the years, Naspers and international unit Prosus have become the largest technology group on the African continent and one of the most valuable groups on the JSE. Tied to this stock market success is one of the highest share prices in market, particularly for Naspers..
On Monday, the group said it was moving ahead with its share subdivision — in essence a share split.
According to the Corporate Finance Institute, a stock split is a decision by a company to increase the number of outstanding shares by a specified multiple.
This is typically done to reduce the price per share of a company’s securities without affecting its market capitalisation.
In this case, the subdivision will be done in the ratio of five-for-one for each respective class of issued shares.
Naspers has two classes of stock: N ordinary shares and A shares, which carry super voting rights.
In a note to investors, the group said: “The market price of Naspers shares has increased significantly in recent years. Naspers N ordinary shares currently trade at one of the highest prices per share on the JSE, significantly exceeding the average price per share of constituents of the JSE’s top 40 index.”
In light of this, “the Naspers board of directors resolved to implement the Naspers share subdivision with the objective of enhancing accessibility to Naspers’ shares for a broader base of investors, while preserving the existing economic and voting interests of all shareholders”.
In addition, the split is expected to align the price per Naspers N ordinary share more closely with that of Prosus, trading at about R1,118.
All the resolutions required to implement the change were passed during the group’s latest AGM in August.
This means all the conditions precedent to the share split have been fulfilled, making the set of transactions unconditional and able to proceed to implementation.
The necessary paperwork to effect the change has been filed with the Companies and Intellectual Property Commission (CIPC).
The record date used to determine which shareholders are entitled to the new shares will be October 3. The new shares will be credited to shareholder accounts on October 6.
As part of the series of action, the group will suspend its ongoing share buyback programme until the subdivision is done. The Naspers/Prosus move is one of the largest such corporate actions seen on the JSE with the group reporting it has returned more than $35bn (about R600bn) across the group since inception in 2022.
At 4pm on Monday, Naspers shares were little changed at R5,869.
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