Naspers gets special dividend from Mail.ru

I read a few articles (see here -> Mail.ru Plans $899 Million Dividend on Facebook Disposal) that suggested that Mail.ru, the London listed Russian company is going to be paying a special dividend of 900 million Dollars. So what does that mean to us? Well, Naspers owns around 30 percent of Mail.ru, their stake is worth around 10.1 billion Rands, the current market cap of Mail.ru in London is 3.84 billion Dollars.


Not big, but certainly not small, Naspers did buy the stake initially for 165 million Dollars. Their portion of the dividend will be 270 million Dollars, which is around 2.38 billion Rands. Where did that amount of money come from? Well, a part sale of Facebook, as well as all of their Zynga and Groupon shares. How do they, Mail.ru get so involved in these companies, often taking stakes long before the internet businesses are listed? Well, there is a very interesting guy by the name of Yuri Milner, who is the founder of both Mail.ru and Digital Sky Technologies (DST), a serial entrepreneur that gets his hands real dirty in Silicon Valley.


Milner is also the guy that bought the most expensive single family home ever in the United States, the WSJ suggested 100 million Dollars was paid for a residence in Silicon Valley. Whoa. It must have good views! He has been called many things, Yuri Milner, mostly good things and is really smart and ambitious. As a share holder of Naspers you are able to be part of this guys ambitious plans and drive to invest on both himself and his mates (through DST) and Mail.ru in interesting technology start ups that morph into quality (perhaps overpriced) investments.

For Koos Becker and the fellows over at Naspers, this is a classic case of being alongside these types of people, ambitious and driven and able to create value for their shareholders. And themselves, remember that Koos Becker as per the Naspers annual report remuneration section owns indirectly and directly 12,480,563 shares. At the current share price of around 582 Rands that is equal to 7.263 billion Rands. Wow. That is around 3 percent of the company. His (Becker's) interests are very much aligned to yours as a shareholder. Remember though that some of these are options (3.895 million shares at 176.11 ZAR a share) that he will still have to pay for in time. But even then, he still has a bucketload of shares, the important part is that he is in, up the waist and beyond.


The other guy of course that you have to keep closer dibs on at Naspers is a fellow by the name of Ma Huateng, better known as Pony Ma. Now Pony Ma is the chairman and founder of TenCent. TenCent of course is far more valuable to you as a Naspers shareholder. Naspers owns 34.26 percent of TenCent. With a market cap of 488.14 billion Hong Kong Dollars, that translates to 170.36 billion Hong Kong Dollars for the Naspers holding. According to "the Google" one Hong Kong Dollar equals 1.14 Rands. So, that stake then translates to 194.2 billion Rands. As at the close last evening, Naspers market cap was 243.2 billion Rands. The market is telling you one of two things, either the local participants think that the Hong Kong market is overvalued (possibly) or that the rest of Naspers is really cheap essentially, which I think is wrong.


Unfortunately we will not see any more news from the company until late June, because the company has a March year end. Last year the trading statement came on the 18th of June and the results nine days later. They are always some of the most anticipated results, I guess the company will tell us what they are going to be doing with that cash, around 2.4 billion Rands, or roughly one percent of their market capitalisation from a special dividend from Mail.ru. I suspect that the cash will be deployed elsewhere as the company continues to look for opportunities.