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Oct 09 2009

Naspers buys in Hungary, doesn’t tell a soul

Published by at 12:38 pm under Companies,Top Stories

On the topic of the disclosure duty of listed companies and in support of my “thing” against Naspers and/or the JSE, here another bit of information which hasn’t (yet) made it to South Africa – although it happened in early August. For what I mean with “thing”, read here.

According to Realdeal.hu, a Hungarian online business portal, Naspers “acquired a 75% indirect stake in Arukereso.hu, Hungary’s most popular online product comparison portal”.

The parties agreed not to reveal the purchase price. More specifically, Arukereso was acquired by the Allegro group, which belongs to MIH Internet Europe, a subsidiary of Naspers.

Arukereso will continue to operate under its own name. Allegro earlier purchased Hungary’s popular online auction sites TeszVesz.hu and Vatera.hu and now controls about 90% of this market segment in Hungary. According to Realdeal Italian investor Metronet holds the remaining 25% in Arukereso, a portal which was established in 2004. It was not clear from the article from whom Naspers bought the 75% share.

Arukereso.hu operates similar portals in Romania, Bulgaria, the Czech Republic, Turkey and Portugal. Together, the portals draw about 3.5 million visitors a month. The company’s revenue reached HUF140 million in 2008, for a pre-tax profit of HUF10 million.

Arukereso said it expected turnover to jump by 50% from 2008 to 2009, while pre-tax profit is expected to remain unchanged at around HUF10 million, Realdeal reported.

Another point in case: In June the same Allegro made an offer to all shareholders to buy a Polish financial portal called Bankier.pl. The bank handling the deal, Investec, apparently thought it was important enough to disclose and issued a press statement (or a SENS, if you will). The shareholders had one month to respond to Allegro’s offer. We’re 4 months down the road, and no-one has released any statement yet on the outcome of the offer. Although the SA media reported on the offer in June, no-one has asked or reported anything since.

Surely, there should have been a follow-up SENS, or press release. Should the JSE and/or LSE not have asked questions long ago in this regard? Or do the stock exchanges simply trust in the bona fides of their listed clients, when it comes to their disclosure duties.

(About the SA media and whether they are properly fulfilling their duty to the SA investor when it comes to reporting on the things SA companies are up to on the international stage…well, that’s a topic for another day.)

Now, you could say these are peanut deals against the one recently concluded in South-America (and properly communicated) and need therefore not be reported. But, these deals and the South-American deal are linked in ways which are important for analysts and investors to understand. (Hint: comparative shopping know-how and technology).

Also, a single, small deal may not be significant, but a dozen, or more, of these in the course of a financial year (if I look, I’ll definitely be able to find a dozen unreported, small, deals made all over the world) add up to something significant and may reveal important trends and strategies to investors.

In my view, Naspers is shirking its disclosure responsibility as a listed company. And the SA investor cannot rely on the JSE to keep Naspers on the “disclosure straight and narrow”, because it simply can’t keep track of everything Naspers (and other listed companies operating in the big, wide world) is doing out there.

The solution? Stock exchanges should strip managers of their discretion on what to report and what not. That would require spelling out (listing) exactly what to report (eg. if a CEO of a major subsidiary resigns, then a press release should ALWAYS follow).

This will increase costs for listed companies, but it’ll be money well spent by shareholders.

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