CEO Bob van Dijk: Why Naspers is cashing its Flipkart chips in Walmart's historic $20bn Indian swoop

In the late 1990s, Naspers’s then CEO Koos Bekker and his right hand man, the late Antonie Roux, applied what they termed a “mud on the wall” strategy. Based on the belief that their core print publishing business was dying, using largely borrowed money they took bets on many fledgling internet companies in emerging markets. Among them was a small Hong Kong business called Tencent which they bought half of for just over $30m. That has turned into the best private equity investment in history. Until last month, Naspers never sold a single Tencent share. When it did finally sell, for $9.8bn, a modest two percentage points of its ownership – dropping its stake in Tencent from 33% to 31% - the company realised an astonishing 326 times on its total investment. But such an amazing creation of value brings its own challenges. In its native South Africa, Naspers now has a weighting of over 20% of the Johannesburg Stock Exchange’s all share index, raising concerns the entire nation’s savings are too heavily dependent on a single company. And with its South African domicile having influencing a company’s share price that trades at a 40% discount to the value of its Tencent holding along – with its raft of other assets effectively thrown in for free - global investors continue to agitate for the Chinese stake to be unbundled. Naspers management’s counter argument has always been that it is no one trick pony. And today’s announcement that it is a major beneficiary of Walmart’s $16bn Indian acquisition will surely go some of the way to supporting that view……In this interview, Naspers CEO Bob van Dijk tells the story of another hugely successful bet for Naspers, and what it will be doing with what is now a $12bn cash pile built in the past month.