APPORTIONMENT VALUE UNBUNDLING OF MULTICHOICESource: RNS
(Incorporated in the Republic of South Africa)
(Registration number: 1925/001431/06)
Share code: NPN
LSE ADS code: NPSN ISIN: US 6315121003
("Naspers" or the "Company")
ANNOUNCEMENT IN RESPECT OF THE APPORTIONMENT OF EXPENDITURE AND MARKET VALUE IN RESPECT OF THE UNBUNDLING OF MULTICHOICE GROUP LIMITED
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT OR WOULD REQUIRE FURTHER ACTION FOR SUCH PURPOSE
Naspers "N" shareholders ("Naspers Shareholders") are referred to the announcements released by Naspers on SENS on 21 January 2019 and 19 February 2019 regarding the proposed unbundling by Naspers, by way of a distribution in specie, of 438 837 468 ordinary shares in the issued share capital of MultiChoice Group Limited ("MultiChoice") held by Naspers (being 100% of the issued share capital of MultiChoice) ("Unbundling") in the ratio of one ordinary share in the issued share capital of MultiChoice ("MultiChoice Share") for every one Naspers "N" ordinary share held at 17:00 on Friday, 1 March 2019, being the Unbundling Record Date, with the last day to trade in Naspers "N" ordinary shares in order to participate in the Unbundling being Tuesday, 26 February 2019 ("LDT Date").
Unless expressly defined, capitalised terms used in this announcement shall bear the same meanings ascribed to them in the Naspers Unbundling Announcement.
As previously advised, the Unbundling will be implemented in terms of section 46 of the Companies Act No.71 of 2008 and section 46 of the Income Tax Act No.58 of 1962 ("Income Tax Act"). The purpose of this announcement is to notify Naspers Shareholders of the apportionment ratio to be applied by Naspers "N" Shareholders in determining the portion of their existing expenditure and/or market value (if relevant) in their Naspers shares to be allocated to the Unbundled MultiChoice Shares whilst the balance will be reflected in respect of the retained Naspers "N" Shares.
2. Apportionment tax principles
Naspers Shareholders will have a combined expenditure in respect of Naspers "N" shares and the MultiChoice Shares received pursuant to the Unbundling.
2.1 Naspers Shares held as trading stock
Any Naspers Shareholder holding Naspers shares as trading stock will be deemed to acquire the MultiChoice Shares as trading stock. The combined expenditure (for the purposes of income tax) of such Naspers shares and MultiChoice Shares will be the amount originally taken into account by the Naspers Shareholder prior to the Unbundling in respect of those Naspers shares, as contemplated in section 11(a), section 22(1), or section 22(2) of the Income Tax Act.
The original expenditure incurred in respect of the "N" ordinary shares will be apportioned between the MultiChoice Shares and the "N" ordinary shares by applying the ratio that the market value of MultiChoice Shares bears to the sum of the market value of the MultiChoice Shares and the "N" ordinary shares at the end of the business day after the LDT Date, being determined with reference to Naspers and MultiChoice closing share prices on the first business day after the LDT Date. This ratio must be used in the determination of any profits or losses derived on any future disposals of the MultiChoice Shares or Naspers "N" Shares.
The expenditure so allocated to the MultiChoice Shares will reduce the expenditure of the Naspers Shares held, thus allocating the expenditure between the Naspers Shares and the MultiChoice Shares.
2.2 Naspers Shares as capital assets
Any Naspers shareholder holding Naspers "N" shares as capital assets will be deemed to acquire the MultiChoice Shares as capital assets. The original expenditure incurred prior to the Unbundling in respect of the Naspers "N" shares, that is allowable in terms of paragraph 20 of the Eighth Schedule to the Income Tax Act, and (where applicable) the CGT valuation of the Naspers "N" shares, as contemplated in paragraph 29 of the Eighth Schedule to the Income Tax Act, will be apportioned between the MultiChoice Shares and the Naspers "N" Shares by applying the ratio that the market value of MultiChoice Shares bears to the sum of the market values of the MultiChoice Shares and Naspers "N" Shares at the end of the business day after the LDT Date, being determined with reference to Naspers and MultiChoice closing share prices on the first business day after the LDT Date.
This ratio must be used in the determination of the capital gain or loss derived on any future disposals of the Unbundled MultiChoice Shares or Naspers shares.
The expenditure (and CGT valuation, where applicable) so allocated to the MultiChoice Shares will reduce the expenditure (and CGT valuation, where applicable) of the Naspers shares held, thus allocating this cost history between the Naspers shares and the MultiChoice Shares.
The shareholders will be deemed to have acquired the Unbundled MultiChoice Shares on the date on which the Naspers shares were originally acquired.
Naspers Shareholders are hereby advised to consult their own professional tax advisors should they have any queries regarding the taxation consequences of the Unbundling and the calculation of their costs.
3. Apportionment ratio
Naspers "N" Shareholders are hereby advised that the expenditure, in respect of their "N" shares, as referred to above must be apportioned in the ratio of 96.6% to a Naspers "N" share held after the Unbundling and 3.4% to a MultiChoice Share (Apportionment Ratio").
The Apportionment Ratio is based on the closing price of 301,700.00 South African cents per Naspers "N" share and 10,610.00 South African cents per MultiChoice Share on Wednesday, 27 February 2019.
THIS ANNOUNCEMENT IS NOT INTENDED TO BE A COMPLETE ANALYSIS OF THE TAX IMPLICATIONS OF THE UNBUNDLING. IT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSIDERED TO BE, LEGAL OR TAX ADVICE. NASPERS SHAREHOLDERS ARE ADVISED TO CONSULT THEIR OWN PROFESSIONAL TAX ADVISERS ON THE TAXATION CONSEQUENCES OF THE UNBUNDLING IN BOTH SOUTH AFRICA AND THEIR JURISDICTION OF RESIDENCE AND THE CALCULATION OF THEIR COSTS FOR TAX PURPOSES.
The release, publication or distribution of this announcement in jurisdictions other than South Africa may be restricted by law and therefore persons into whose possession this announcement may come should inform themselves about, and observe, any such applicable restrictions or requirements. Any failure to comply with such restrictions or requirements may constitute a violation of the securities laws and regulations of any such jurisdiction. To the fullest extent permitted by applicable law, Naspers disclaims any responsibility or liability for the violation of such restrictions or requirements by any person. This announcement has been prepared for the purposes of complying with the JSE Listings Requirements and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of those outlined above.
This announcement does not constitute an offer or form part of any offer or invitation to purchase, subscribe for, sell or issue, or a solicitation of any offer to purchase, subscribe for, sell or issue, any securities including Unbundled MultiChoice Shares (whether pursuant to this announcement or otherwise) in any jurisdiction, including an offer to the public or section of the public in any jurisdiction. This announcement does not comprise a prospectus or a prospectus equivalent announcement, nor does it constitute an advertisement of an offer as envisaged in the Companies Act.
This announcement may include forward-looking statements including those about the Naspers Group, the MultiChoice Group, their prospects and/or the Unbundling and/or the Listing, which are based on current expectations and projections about future events. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target", "believe", "expect", "aim", "intend", "may", "anticipate", "estimate", "plan", "project", "will", "can have", "likely", "should", "would", "could" and other words and terms of similar meaning or the negative thereof. These forward-looking statements are subject to risks, uncertainties and assumptions including about the Naspers Group, the MultiChoice Group, the Unbundling and the Listing. In the light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur or occur in the manner suggested by the forward-looking statement. No representation or warranty is made that any forward-looking statement will come to pass and, in particular, no representation or warranty is made that the Unbundling or the Listing will be implemented (either wholly or in part). No one undertakes to publicly update or revise any such forward-looking statement. The information contained in this announcement is provided as at the date of this announcement and is subject to change without notice. Naspers and the MultiChoice Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based.
28 February 2019
Investec Bank Limited
Joint Financial Advisers
Citigroup Global Markets Limited
Morgan Stanley & Co International plc
Naspers is a global consumer internet group and one of the largest technology investors in the world. Operating and investing in countries and markets across the world with long-term growth potential, Naspers builds leading companies that empower people and enrich communities. The group operates and partners a number of leading internet businesses across the Americas, Africa, Central and Eastern Europe, and Asia in sectors including online classifieds, food delivery, payments, travel, education, health, and social and internet platforms.
Every day, millions of people use the products and services of companies that Naspers has invested in, acquired or built, including Avito, Brainly, BYJU'S, Codecademy, eMAG, Honor, ibibo, iFood, letgo, Media24, Movile, OLX, PayU, SimilarWeb, Swiggy, Takealot, and Udemy.
Similarly, hundreds of millions of people have made the platforms of its associates a part of their daily lives: Tencent (www.tencent.com; SEHK 00700), Mail.ru (www.corp.mail.ru; LSE: MAIL), MakeMyTrip Limited (www.makemytrip.com; NASDAQ:MMYT) and DeliveryHero (www.deliveryhero.com; Xetra: DHER).
Today, Naspers companies and associates help improve the lives of around a fifth of the world's population. Naspers actively searches for new opportunities to partner exceptional entrepreneurs who are using technology to address big societal needs.
Naspers has a primary listing on the Johannesburg Stock Exchange (NPN.SJ) and a secondary listing on the A2X Exchange (NPN.AJ) in South Africa, and has an ADR listing on the London Stock Exchange (LSE: NPSN).
For more information, please visit www.naspers.com.
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