Naspers/Prosus: South African "Keswicks"

Back in September 2019, the spinoff/listing of Prosus (PRX NA) was predicated on the "unsustainable size" of Naspers (NPN SJ) as a % of the JSE Shareholder Weighted Index (SWIX) - and to unlock value for shareholders.

Yesterday, Naspers and Prosus announced a Proposed Voluntary Share Exchange Offer to Naspers Shareholders, which again addresses the SWIX situation, and if successful till increase Prosus' free float to 42.8%, with 59.7% of the economic interest of Prosus owned by that free float (and 40.3% owned by the free float of Naspers).

The unwieldy deal offers 45.4% of Naspers issued shares the option of converting shares into Prosus at a ratio of 2.27443x.

Assuming all the pieces neatly fit together, Naspers will own 57.2% of Prosus, and Prosus 49.5% of Naspers.

This resulting circularity is reminiscent of the Jardine Matheson Holdings (JM SP) / Jardine Strategic Holdings (JS SP) cross-holding, which was collapsed earlier this year.

This time, the holders of Naspers super-voting shares are the "Keswicks".