Prosus CEO Bob van Dijk has announced his resignation, leaving behind an unresolved issue for his successor. As the largest investor in Tencent, Prosus is faced with a challenge regarding its 25% stake in the Chinese e-commerce giant. The Amsterdam-listed company, controlled by South Africa’s Naspers, has an $80 billion valuation, with the Tencent stake accounting for 75% of its portfolio value. The remaining valuation comes from a stake in Delivery Hero and various technology startups.
One persistent problem during van Dijk’s tenure was the significant discount between the value of Prosus shares and its listed assets, including Tencent. This discount, which used to stand at 60%, has been reduced to 40% following the sale of small portions of Tencent shares and the subsequent buyback of Prosus stock. However, the gap still reflects the difficulty investors face in accurately valuing Prosus. Shareholders have found more success in purchasing Tencent shares directly.
The reasons behind van Dijk’s departure remain undisclosed, but the continued discount likely played a role. As interim CEO, Ervin Tu, a former SoftBank Vision Fund and Goldman Sachs dealmaker, may explore options such as spinning off unlisted assets like iFood and PayU or implementing buybacks and dividend payments to boost returns. However, without a concrete plan for the Tencent stake, the discount is expected to persist.
In a joint statement, Prosus and its parent company Naspers announced van Dijk’s resignation from his role as CEO of both companies. Ervin Tu, the Chief Investment Officer, has been appointed as the interim CEO. While the companies did not provide a reason for van Dijk’s departure, a source close to the matter revealed that it was not a major surprise, considering van Dijk’s decade-long tenure, which is nearly double the average CEO’s duration at FTSE 100 companies.
Prosus holds a 26% stake in Tencent, which currently boasts a market capitalization of $381 billion. Following the news of van Dijk’s resignation, Prosus shares experienced a 2.8% decline, reaching 28.8 euros as of 1023 GMT on September 18. The departure of van Dijk leaves behind significant uncertainty for Prosus regarding its Tencent stake and the ongoing challenge of properly valuing the company’s assets.
More detail via Reuters here… ( Image via Reuters )