Fri, 29 May 2020

The overwhelming majority of Naspers shareholders chose to get shares in its new tech company Prosus, rather than more Naspers shares.

Investors representing 96.3% of Naspers shares went for the default option: They received one Prosus share for every Naspers N share they held. Alternatively, they could have opted to get 0.36986 new Naspers shares for every Naspers share they owned.

Almost 422 million new Prosus N shares will be issued to Naspers shareholders, compared to only 6 million new Naspers N shares. As a result, the number of Naspers shares outstanding are increasing by 1.3%, Reuters reported.

Following the divvying up of shares, Naspers will now hold 74% of Prosus.

The Prosus share price is currently trading at 72.85 euro in Amsterdam, following its debut of 74.50 euro last week. On the JSE, it's trading at R1 178.06 - from a high point of R1 250 last week.

Bloomberg reported that the US investment bank Jefferies rated Prosus as an "underperform". Jefferies expects a normalizing discount after index buying, with the figure probably settling at the narrow end of the recent Naspers range of 30%-40%, from the current 17%, Bloomberg reported.

Capital gains tax

Individuals and trusts with a direct shareholding in Naspers will pay capital gains tax on the full Prosus share price as at listing, says PSG Wealth portfolio manager Schalk Louw.

Depending on individual circumstances, this could work out to a maximum of 18% of the Prosus share price for individuals, 22.4% for companies and 36% for trusts - ignoring the annual exclusion of R40 000 in capital gains granted to individuals and special trusts. This will be levied in the current tax year.

However, adds Louw, there is no capital gains tax payable if you received Prosus as part of a Naspers holding in your pension fund or retirement annuity - and also not if you held those shares via a tax-free savings fund or account.

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