Naspers Buys UK's Tradus for $1.9 Billion, Shares Dip
Africa's largest media firm, Naspers, said on Tuesday it would buy UK Internet auction firm Tradus for 946 million pounds ($1.90 billion) to extend its reach into central and eastern Europe.
The announcement sent Naspers shares diving as much as seven percent. It said the directors of Tradus would recommend the offer to shareholders.
Under the deal, which South Africa's Naspers said amounts to about 13.2 billion rand, it will pay 18 pounds for each share of Tradus, which represents a 19 percent premium to the mid-market closing price of 1,510 pence per Tradus share on November 6.
Naspers and Tradus, formerly QXL Ricardo, had agreed on the cash offer to be made by Myriad International Holdings, a unit of Naspers, the companies said in a statement.
Tradus will consolidate the group's presence in Poland and provide a platform to extend its reach to the other central European and eastern European markets, Naspers said.
Traders and fund managers said Naspers's stock fell partly on a general market decline, sparked by global stocks losses, as well as jitters that it may be over-paying for Tradus.
"It seems a little bit expensive. People feel they may be over-paying and that's why it took a smack," one trader said.
Abri du Plessis, chief investment officer at Gryphon Asset Management said: "People are skeptical about such announcements especially in a weakening market like this and react negatively to such news. It's probably seen as not a good thing spending a lot of money going for risk at a time like this."
Naspers shares were the biggest blue-chip faller, trading 4.94 percent lower at 172.50 rand against a 2 percent decline on the Top-40 index.
Naspers said it began investing in the Internet in 1997 and as has various internet units in Africa. In China, the group said it has a roughly one third interest in market leader Tencent, and in Russia, Naspers has a broadly similar stake in Mail.ru, which it said is developing into a market leader.