Will there ever be enough money in playing middleman between restaurants and consumers to make these giant investments really make long-term sense?
— Jason Clampet
The Cape Town-based media and technology business will buy stock from Rocket Internet SE at 29.50 euros a share, it said in a statement on Thursday. That’s a discount of 12 percent based on Wednesday’s closing price, making the South African company the biggest investor with a 24 percent holding.
“The increasing portion of consumer spend that the segment attracts represents an attractive growth opportunity for us,” Meloy Horn, a spokeswoman for Naspers said in an emailed response to questions. The business model has “attractive financial returns and untapped potential in geographies that are familiar to Naspers, all combine to make it a strong investment proposition.”
The deal strengthens Naspers’s position in internet food delivery, with Delivery Hero sitting alongside iFood in Brazil, Swiggy of India and Mr Delivery in South Africa in the company’s portfolio. Naspers has become one of the world’s largest investors in e-commerce ventures as it tries to build on the success of its early stage investment in Chinese technology giant Tencent Holdings Ltd., which is now worth about $136 billion. It’s also Africa’s largest pay-TV provider.
“It’s another company in the developing world portfolio and reinforces the value sitting in Naspers,” Michael Treherne, a money manager at Johannesburg-based Vestact, said by phone.
Delivery Hero is the food delivery market leader in 36 of 42 markets around the world and counts Yemeksepeti.com of Turkey among its businesses. The deal enables Naspers to re-build its presence in the Turkish market after closing down Markafoni.com in June, six years after first investing in the unprofitable online retailer.
The company is seeing potential for growth across a broad range of the regions, Horn said. “Significant growth has already occurred in Western Europe and North America, but Asia, Latin America, and the Middle East, among other markets that Naspers operates in, are at the beginning of the growth cycle,” she said.
Naspers shares fell 0.4 percent to 2,865 rand at the close in Johannesburg, valuing the company at 1.26 trillion rand ($93 billion). Rocket climbed as much as 7.9 percent to 22.28 euros in Frankfurt, an eight-month high, and was last trading at 21.57 euros.
Rocket, a Berlin-based startup factory, will retain a 13 percent shareholding in Delivery Hero and “continues to participate in a large way,” Chief Executive Officer Oliver Samwer said on a call with reporters. The company backed the food service’s successful June initial public offering in Frankfurt.
Rocket also reported improving group profitability and smaller second-quarter operating losses at key startups including Global Fashion Group. The successful IPO of Delivery Hero came as a boost after its other big investment, food-box startup HelloFresh, shelved listing plans in 2015.
–With assistance from Thembisile Dzonzi and Giles Turner
©2017 Bloomberg L.P.