19 December 2007
MIH Internet, a wholly owned subsidiary of South African media group Naspers, has made a £946-million (about R13.1-billion) offer to acquire London-listed Tradus, which operates online trading platforms and other related internet service websites in 12 mainly Eastern European countries.
The acquisition would be the largest so far by Africa’s largest media company, which has to date been buying minority stakes in media and internet-related companies in emerging markets.
Tradus, established as QXL Ricardo plc in 1997, operates auction websites in Eastern Europe under various brand names, and in Poland they operate automotive and real estate classified sites, a price comparison site and payment services system.
“In its own strategy, Naspers has prioritised the internet sector for expansion. Success has been achieved in the sub-segments offering users communications, social networking and community platforms,” the company said in a statement on Tuesday.
“In pursuit of this strategy, Naspers today has various internet investments on the African continent, in China, Russia and India. With these investments, the Naspers Group has established a strong presence in the major emerging markets.”
Naspers has identified Central and Eastern Europe as attractive emerging markets to invest in, and the acquisition of Tradus would consolidate the group’s position in Poland, where it is currently finalising the acquisition of a controlling stake in Gadu-Gadu, a company that operates an instant messaging service.
“We are delighted that the Tradus Board intends unanimously to recommend our offer to its shareholders,” Naspers chief executive Cobus Stofberg said. “The operations of the Naspers Group and Tradus complement each other perfectly and significant advantages can be obtained by aligning Tradus’ businesses with Naspers’ other internet investments in Central and Eastern Europe.”
Naspers’ other investments in emerging countries include a roughly one-third interest in Tencent, a leading internet services portal in China that operates an instant messaging client called QQ, and a similar stake in Mail.ru, which is developing into a leading e-mail portal in Russia.
In India, meanwhile, the company is organically developing an internet business that focuses on the youth community, featuring a search engine customised to cater for local users and content.
In South Africa, Naspers’ investments include Multichoice, which runs the DSTV satellite subscription service, the M-Net and Supersport television channels, internet service provider M-Web, newspaper and magazine publisher Media24, general consumer portal 24.com, e-retailer Kalahari.net and a 30% stake in local instant messaging service Mxit Lifestyle.
“Apart from the investment in Tencent and Kalahari, other Naspers platforms have not yet generated transaction income,” the company said. “Our existing internet services rely on the generation of revenue mainly through advertising and value added communication services.”
“The intention is that an investment in the Tradus transaction platform will allow the group to diversify its internet revenue streams to include transaction income.”
The deal is subject to several conditions, including obtaining relevant regulatory approvals and approval by the companies’ shareholders.