Johannesburg - Naspers, Africa's biggest media group, said yesterday it would sell shares worth $750 million (R5.4 billion) to fund a new round of international expansion.
Naspers is planning further acquisitions in Brazil, Russia, India and China to beef up its internet and electronic media businesses.
So far, it had spent a total of R4.6 billion to buy a 30 percent interest in Brazil's media magazine publisher, Abril; a 25 percent interest in China's internet advertising group, Tixa; and a 30 percent stake in Russian internet company mail.ru. It also has a start-up internet business in India. The issue of new shares will give Naspers a war chest of about R10 billion.
Naspers chief financial director Steve Pacak said the markets had shown excellent growth in recent years. He said the company was pursuing "several" other opportunities, although no binding agreements had been made at this stage. The company said from today until next week Thursday it would sell the listed N shares through private placement of shares to institutional investors both locally and internationally.
The capital raising exercise would be run by Citigroup Global Markets.
The announcement prompted speculation that Naspers was looking for a major acquisition, resulting in a R6.30 drop in the share price to close at R181.20. The media sector lost 2.71 percent.
Rajay Ambekar, a portfolio manager at Cadiz African Harvest, said Naspers already had about R4 billion in cash and was not geared, and yet it was going to the market to raise more cash. This raised speculation that the company might be planning a large acquisition, he said.
Reuters quoted Ambekar saying that if Naspers was planning an acquisition, it was a "toss up between India and Russia, but I would guess they are looking at Russia. They have said India is too expensive."
Naspers chief executive Koos Bekker said the capital raising would "strengthen our ability to participate as a strategic partner in media companies across the major emerging markets".
Ambekar said there seemed to be strong foreign demand for Naspers shares especially from the UK, but it was "difficult to say whether locally" there would be a huge uptake.
The company also said yesterday pay TV provider MultiChoice had signed up 100 000 new subscribers for the three months to December. At the end of September, MultiChoice had more than 2 million subscribers with 1.3 million of them in South Africa.
Last month Naspers bought a 30 percent stake in MXit, adding the home-grown instant messaging business to its portfolio for an undisclosed amount. Naspers also owns the biggest-selling daily newspaper, Daily Sun, and a string of magazines.