Naspers to acquire net auctioneer Tradus

JOHANNESBURG: Naspers, Africa’s largest media company, agreed to buy internet auctioneer Tradus for £946 million to tap growth in eastern Europe. Naspers, based in Cape Town, will pay £18 for each share in London-based Tradus, 11% more than the closing price on Monday, according to a statement to Johannesburg’s Stock Exchange News Service on Tuesday. Naspers fell as much as 7.2% in Johannesburg trading.

“The drop is probably a function of the size of the acquisition,” Rajay Ambekar, an analyst at Cadiz African Harvest Asset Management, which manages more than $7.3 billion, said by phone from Cape Town. The deal will use up all the company’s cash and the market is probably still a bit “cautious about paying these sorts of multiples for internet companies,” he said.

Tradus, formerly QXL Ricardo, operates in 11 European countries including Poland, Hungary and Slovakia, according to its website. Naspers has been expanding in countries including Poland and Russia to make up for slower growth at home, where rising interest rates are crimping advertising revenue. South African consumer spending growth will slow further, weighing on advertising and circulation sales, Naspers said November 27.

Naspers fell 9 rand to 172 rand in Johannesburg. Before Tuesday, the stock had gained 9% this year, trailing the FTSE/JSE Africa All Share Index’s 15% climb. Tradus surged as much as 9.4% to 1,772 pence in London.

Tradus has surged this year, more than doubling in LSE trading, on speculation the company would be acquired. The stock rose the most in almost 10 months on November 7 after Tradus said it had been approached about a takeover.