Koos Bekker’s share sales: Bricks over tech?

If you happen to agree with US historian Graham T Allison’s “Thucydides Trap” view of global affairs (the state of “inevitable discombobulation that occurs when a rising power threatens to displace a ruling power”) and, if you also believe that China will emerge the superior global force from that historical process, then Tencent is surely one of the most attractive investments on our current turbulent investment horizon. 

In fact, leaving aside Thucydides, if you just believe Tencent will remain a long-term sustainable profit generator, the share deserves to be among your top picks in these difficult times. That’s despite a large chunk of those profits coming from international businesses such as Epic Games.  

A few months ago, China’s Xi Jinping did something of a U-turn on his country’s home-grown high-tech success stories: instead of cracking down on their powerful leaders, he started treating them as national champions. How long that change of heart will last is anyone’s guess, but the trade war with the US and increased opportunities from China’s cutting-edge AI have boosted its longevity prospects. And there’s the additional plus – from the Xi perspective – that Tencent’s Pony Ma is far more circumspect than the rumbunctious Jack Ma over at Alibaba. 

Of course, if you prefer something more familiar than Hong Kong-listed Tencent, there’s always our very own Naspers, which has a controlling stake in Amsterdam-listed Prosus, which in turn holds an enormously valuable 24% of Tencent.  

And better still, you can get access to this exceptionally attractive investment at a hefty discount if you buy it via Prosus or Naspers. 

According to the latest data, Prosus’s net asset value (NAV) is currently €61.60 per share. This compares – badly – with the Prosus share price of just €36. The bulk of that NAV – €123.4bn out of a total €159.3bn – is attributable to Tencent. 

Naspers’s NAV is currently R8,217.60 per share – again, overwhelmingly attributable to Prosus’s stake in Tencent. And, what a bargain given that the Naspers share price is almost half of that at R4,287.30. 

So much for all that fancy, incredibly expensive and wearyingly complicated restructuring pushed through by the board a few years ago.  

Still, though it hasn’t made much impact on the discount, the restructuring has significantly relieved one major problem – that of Naspers’s dominance of the JSE. As Naspers became enormously more valuable it was bumping up against restrictions on the size of fund managers’ exposure to any single investment. What a problem to have. 

In terms of market capitalisation, its current R700bn is still one of the largest shares on the JSE, but it is way off the R2-trillion level ahead of the hiving off of Prosus in 2019 – in no small part thanks to the aggressive share-repurchase programme launched in 2022. 

To get a sense of just how aggressive has been the bid to shrink Naspers, recall that in 2016, as the Naspers share price was shooting past R1,000, the company had 438-million shares in issue. Today it has only 164.4-million.  

In the three months to April 9 2025, Naspers spent R22.9bn buying back 5.2-million of its own JSE-listed shares. The funds for those purchases came from the sale of 29.7-million Prosus shares on the Amsterdam stock exchange. Inevitably Prosus is becoming larger – it currently has a market capitalisation of more than R3-trillion – as Naspers becomes smaller. 

Personal portfolio planning

That’s the very big picture. The smaller picture is the change in holdings of key Naspers shareholders over the years. Much of this change reflects the impact of the Prosus listing on the Amsterdam exchange and the subsequent corporate transactions by Prosus. There’s also an element of personal portfolio planning.  

For instance, last December Naspers chair Koos Bekker sold 3.9-million of his Prosus shares, generating about €156m. The sale leaves Bekker with 15.7-million Prosus shares, which are currently valued at about R12.4bn. Or, rather, because they’re listed in Amsterdam, €565.2m.  

At the time of the transaction Prosus announced that the shares had been sold to fund building operations at hotels in South Africa, the UK and Italy “in which the [Bekker] family trust has an interest”. 

In essence, Bekker has exchanged high-tech equities for a bricks-and-mortar investment. “This was definitely a lifestyle choice by Bekker,” remarked one fund manager. Another queried why he wouldn’t have held onto the shares and borrowed against them. 

(It was the second time in as many years that Bekker has sold Prosus shares to fund his hotel building.) 

The advantage of selling some of his Prosus shares – as opposed to his Naspers shares – is that Amsterdam is a more tax-efficient regime, and it has no foreign exchange controls. An altogether more simple transaction for Bekker, who has made substantial payments to the South African taxman over the years. 

The Naspers stake

In addition to his Prosus shares, Bekker has 1.7-million Naspers shares which are currently valued at R7.3bn.  

Bekker’s Naspers shareholding peaked at 16.4-million in March 2014 at the end of his tenure as Naspers CEO. Between then, and assuming the position of chair in April 2015, he sold 11.7-million of his Naspers shares, which had been allotted to him at a cost of R2bn.  

Without knowing precisely when the shares were sold, estimates of his pre-tax gains on the transaction vary widely between R11.5bn and R21.8bn. At the time a company spokesperson stressed that Bekker “paid the full marginal tax rates on the profits”. 

That hefty sale left Bekker with 4.7-million Naspers shares, which he held onto until the stake was reduced to 1.7-million in 2022 as part of the share swap with Prosus. Things get a little more complicated from there on. 

The 2022 Prosus annual report reveals that Bekker held 4.7-million Prosus shares in 2021, which increased to 11.5-million in 2022. The report explains that “the directors participated in the share exchange” that had been approved by shareholders in July 2021. His holding dipped to just more than 9-million in 2023, when shares were sold “to fund building operations at hotels in various countries in which the [Bekker] family trust has an interest”. The shares were sold at an average price of €69.30.  

The 2024 annual report reveals Bekker’s holding in Prosus had surged again to 19.6-million. The annual report explains that as part of the unwinding of the much-criticised complicated cross-holding structure “additional ordinary N shares were issued to holders of ordinary N shares on a pro rata basis on September 18 2023”. 

If life was much simpler – and it hasn’t been for Naspers since about 2012 – Bekker might now have been sitting with almost 20-million Naspers shares. That’s if he hadn’t sold any Naspers shares to fund his hotel ambitions and the company hadn’t got involved in the creation of a complicated but tax-efficient foreign structure. 

The Public Investment Corporation, on the other hand, has managed to keep things much simpler. Back in 2016 it was the single largest Naspers shareholder with 58.5-million shares equivalent to 13.33%. In 2024 it was still the largest Naspers shareholder with its 28.6-million shares equivalent to a 15.83% stake in the now-shrunken listed entity. In addition it does have a holding of about 5% in Prosus. 

Whatever way you look at it, the past 10 years have been a dramatic and hugely rewarding roller-coaster ride. The next 10 may be even more volatile. Could they be as rewarding? 

_{Top image: Koos Bekker. Picture: Gallo Images/Financial Mail/Hetty Zantman.}