Naspers, in furtherance of its empowerment objectives, is implementing a Broad-Based Black Economic
Empowerment (“BEE”) ownership initiative in relation to MCSA.The MCSA BEE transaction is intended to result in
the acquisition by qualifying Black Persons and Black Groups (“General Black Public” or “Black Participants”) of
ordinary shares in the issued share capital of Phuthuma Nathi Investments Limited (“Phuthuma Nathi”), which will
hold ordinary shares in the issued share capital of MultiChoice South Africa Holdings (Proprietary) Limited (“MCSA
Holdings”), the holding company of MCSA (“the MCSA Empowerment Transaction”).
Phuthuma Nathi is a company whose sole objective is to acquire ordinary shares in MCSA Holdings for the benefit
of its shareholders, being the General Black Public. MCSA Holdings, an indirect wholly owned subsidiary of Naspers,
has, as its only asset, 100% of the issued share capital of MCSA.
A key element of the MCSA Empowerment Transaction is the funding of the purchase by Phuthuma Nathi of up to
45 000 000 ordinary shares in MCSA Holdings (with the total number of MCSA Holdings ordinary shares in issue
being 300 000 000) for R2,25 billion, based on an equity value of R15 billion (enterprise value of R17,43 billion).This
funding for the transaction will be raised by the issue of up to 45 000 000 Phuthuma Nathi ordinary shares at a price
of R10,00 per share in terms of a public offer to the General Black Public, and the issue of up to 180 000 000
Phuthuma Nathi preference shares at a price of R10,00 per share to MIH Holdings Limited (“MIH Holdings”), a
wholly owned subsidiary of Naspers.
2. RATIONALE FOR THE MCSA EMPOWERMENT TRANSACTION
Naspers supports the drive to incorporate previously disadvantaged communities into the South African economy
and believes that BEE may be a driver of economic growth and transformation in South Africa. For some years the
group has advanced BEE in the media industry.
Naspers’s BEE contributions include:
Phuthuma – implemented in 1995, which enabled some 8 000 disadvantaged South Africans to acquire shares in
Electronic Media Network Limited (“M-Net”) and to profit from it
Phuthuma Futhi – implemented in 1998, making a further 10% of M-Net/SuperSport International Holdings
Limited (“SuperSport”) linked shares available for BEE.This scheme closed in the money in April 2004
Welkom – launched in 1998 and scheduled to mature in September 2006, will enable some 17 000 previously
disadvantaged individuals to acquire shares in Naspers.
The group is also conscious of employment equity targets in its South African operations. To this end, a number of
initiatives were launched in the operating businesses, including transformation forums, the acceleration of
employment equity by pursuing employment targets, mentorship for previously disadvantaged employees and
preference in procurement.
Naspers is proud of the fact that 42% of its board already comprises people from previously disadvantaged
communities and 17% are women.We are committed to transformation and the MCSA Empowerment Transaction
is an integral part of this process.
If required, Naspers may undertake further empowerment transactions to ensure compliance with the BEE Codes.
In structuring the MCSA Empowerment Transaction, Naspers developed a set of key objectives (“BEE objectives”)
the Black Participants will comprise a broad base of Black Persons and Black Groupings
the Black Participants are required to fund only 20% of the purchase consideration that Phuthuma Nathi will pay
to acquire shares in MCSA Holdings
economic interest and voting rights in Phuthuma Nathi are secured by the Black Participants immediately
the Black Participants remain shareholders of Phuthuma Nathi for a minimum period of five years (“Minimum
Investment Period”), whereafter they may trade their shareholding to other Black Participants
the minimum level of participation by Black Participants is affordable in economic terms by most people
5. INFORMATION RELATING TO MCSA
MCSA is South Africa’s premium pay-television and internet business. MCSA also has a 29,98% interest in
M-Net/SuperSport and 100% in M-Web Holdings (Proprietary) Limited (“MWEB”).
MCSA provides premium television entertainment through its DStv bouquets to more than 1 million
subscribers in South Africa.
Operations include subscriber management services and digital satellite television platforms broadcasting over
70 video and over 60 audio channels. Included are seven data channels with interactive television offerings.
M-Net/SuperSport provide premium thematic channels and exclusive content to the subscriber base of MCSA.
M-Net provides premium entertainment channels and SuperSport provides sports channels carried by MCSA
on its pay-television platforms.
MWEB provides the infrastructure for MCSA’s interactive platform. MWEB has approximately 324 000 dial-up
subscribers and 19 000 broadband ADSL subscribers.
6. FINANCIAL EFFECTS
Profit on disposal to Naspers
The book profit arising in respect of the MCSA Empowerment Transaction to Naspers shareholders amounts
to approximately R2,25 billion. The adjustment has been made directly to equity in accordance with Naspers’s
Pro forma financial effects
The table below sets out the unaudited pro forma financial effects of the MCSA Empowerment Transaction,
which are based on the published financial results of Naspers for the year ended 31 March 2006.
The unaudited pro forma financial effects, for which the Naspers board is responsible, are presented for
illustrative purposes only and may not give a fair reflection of the financial position and results of operations
post the implementation of the MCSA Empowerment Transaction.
Per Naspers share
Core HEPS (cents)
Fully diluted EPS
Number of shares in issue (’000)
Weighted average number of shares in issue (’000)
Fully diluted weighted average number of shares
THE INTRODUCTION OF BLACK ECONOMIC EMPOWERMENT SHAREHOLDERS
IN RELATION TO MULTICHOICE AFRICA (PROPRIETARY) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1925/001431/06)
Share code: NPN ISIN: ZAE000015889
(“Naspers” or “the company”)