Naspers Limited (Naspers) (JSE: NPN; LSE: NPSN) (together with its consolidated subsidiaries, the "Group") provides an update on its response to the COVID-19 pandemic, and outlines its actions to safeguard its employees, customers and businesses as well as to support the communities in which it operates.

(Bloomberg) -- South Africa’s Naspers Ltd. and an investor group backed by German publisher Axel Springer SE are among suitors that submitted bids for EBay Inc.’s classified-advertising business, according to people familiar with the matter.Axel Springer teamed up with KKR & Co. for its offer, according to the people, who asked not to be identified because the information is private. Online classifieds company Adevinta ASA also made a bid for the unit by this week’s deadline, the people said. A consortium of Blackstone Group Inc., Permira and Hellman & Friedman has also been pursuing the business, the people said.The unit could fetch $8 billion to $10 billion, according to one of the people. EBay could decide as soon as next week which suitors advance to the next round, the people said.EBay shares rose 2.3% in New York Friday, valuing the company at about $30.5 billion.A potential sale of EBay’s classifieds unit could rank among the largest deals in Europe involving private equity firms this year. EBay is seeking a sale of the business at a time when market turmoil has hampered financing for leveraged buyouts, forcing companies to put a number of bidding processes on hold. Walmart Inc. paused the sale of a majority stake in its U.K. grocery chain Asda to focus management’s attention on running the business amid unprecedented spikes in demand driven by the coronavirus.Representatives for EBay, Adevinta, Axel Springer, Blackstone, KKR, Naspers and Permira declined to comment. A spokesperson for Hellman & Friedman didn’t immediately respond to a request for comment.EBay said in February it was in talks with multiple parties about a sale of the business and expected to update investors by the end of the first half. While the San Jose, California-based company reported better-than-expected sales in the first quarter, the classifieds unit dragged on results as the Covid-19 pandemic forced the closure of car dealerships.EBay’s classified business has attracted interest from several strategic and private equity firms, Dealreporter and The Wall Street Journal have previously reported, citing unidentified people. Permira partially owns Polish online auction site Allegro. Hellman & Friedman is a backer of digital car marketplace Autoscout24 GmbH.E-commerce group Naspers, Africa’s largest company by market value, is seeking to boost its portfolios in classifieds, food delivery and digital-payments businesses as well as education, Chief Executive Officer Bob Van Dijk said in an interview this month. The company acquires online companies around the world through Amsterdam-listed Prosus NV, which the company spun off in September last year.German publisher Axel Springer has ramped up its hunt for deals to accelerate a shift into digital media since agreeing to go private with the help of KKR last year.Norway’s Adevinta was spun off of Scandinavian media conglomerate Schibsted ASA last year with the goal of expanding in the global online classified market.(Updates with details on Axel Springer and Adevinta in last two paragraphs)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg) -- It’s getting harder to believe in Tencent Holdings Ltd.’s comeback.The Chinese social media goliath’s profit plummeted 13% last quarter -- worse than the most pessimistic analyst anticipated -- after an economic downturn depressed advertising and prompted charges within its huge portfolio of investments. Marketers fled to nurse shrinking budgets. And costs jumped 21% as Tencent hoovered up pricey content to feed its Netflix-style service. Shares in Prosus NV, which groups largest shareholder Naspers Ltd.’s internet holdings, fell as much as 4%.Tencent was supposed to hit the comeback trail this year after a nine-month freeze on game approvals gutted its most profitable business in 2018. But a sharp Chinese economic slowdown, competition from up-and-comer ByteDance Inc. for internet traffic and advertising, and now tricky political considerations is snarling that recovery. That’s a key reason its stock has vastly under-performed arch-rival Alibaba Group Holding Ltd. this year, creating a gap of roughly $90 billion in their market valuation. But after a brutal couple of years, its long-awaited turnaround may come down to a game -- good thing that game is Call of Duty, one of the best-selling franchises in industry history.On Wednesday, Tencent reported net income of 20.4 billion yuan ($2.9 billion) in the September quarter. That came alongside a 90% drop in one-time gains -- an item that tracks its vast portfolio of startups around the world -- after swallowing charges for investments in connected automobiles.“The results were unbearable,” said David Dai, a Hong Kong-based analyst with Bernstein. “Games and media advertising were especially bad.”Read more: Tencent Falls $90 Billion Behind Alibaba After NBA China RowChina’s economic slowdown is dousing revenue growth across Tencent’s platforms, dampening appetite for advertising among large brands as well as subscriptions to its video and music streaming services. Sales from media advertising, including on the Netflix-like Tencent Video service, plummeted 28% as marketers cut spending while major shows got delayed. Beijing’s decision to cap playing time for underage users is also prompting Tencent to spend more on producing AAA-rated mobile titles that appeal to a global audience.The company is also grappling with a potential suspension of National Basketball Association game broadcasts -- which drew half a billion viewers last year -- after Houston Rockets General Manager Daryl Morey triggered a media blackout in China by tweeting support for Hong Kong’s pro-democracy protests. The company had paid $1.5 billion for five years of exclusive streaming rights. Tencent President Martin Lau said however he foresaw no long-lasting impact.“What we’re trying to do is to work through this difficult period and maintain the positive engagement of sport between the users and the sports franchise, and over time hope the problem will solve itself,” Lau told analysts on a conference call.Tencent’s Greatest Strength? It’s Not Alibaba: Tim CulpanTencent might see light at the end of the tunnel in the fourth quarter. It hit pay-dirt with its smartphone adaptation of Call of Duty. The game garnered more than 100 million downloads in the first week, putting it ahead of Nintendo Co.’s Mario Kart Tour. That was four times more than Fortnite’s mobile version managed. That strong debut positioned it to join the other mega cash-cows in Tencent’s stable: old favorite Honour of Kings and 2019’s standout hit, Peacekeeper Elite.Longer term, Tencent owns stakes in some of the biggest U.S. game studios and publishers, including the outfits that created household names Fortnite, League of Legends and World of Warcraft. The Chinese company is now counting on converting popular PC content for smartphones to re-kindle growth. The pipeline for such content stretches into 2022, the company says.While Call of Duty downloads surged right out the gate, the trick now for Tencent is to get players spending in-game. It needs that revenue boost to offset pain in other parts of its business. Revenue still rose a respectable 21% in the September quarter, to 97.2 billion yuan, helped by a fintech division that grew sales 36%.Despite a tumultuous year, Lau said in February the company won’t scale back on investment. The company has sunk money into more than 700 portfolio companies, including 122 that have become unicorns worth $1 billion or more. In China, its portfolio companies are worth roughly $107 billion, according to data compiled by Bloomberg. But it’s likely a chunk of those associated startups face the same sort of external pressures as their giant backer.“Video ads and subscribers remain under pressure,” Jerry Liu, a Hong Kong-based analyst at UBS, said in a report. “Investors are pricing in lower structural growth in gaming, pressure in advertising growth due to macro and competition, and more regulatory headwinds in online content.”(Updates with executive’s comments from the seventh paragraph)\--With assistance from Zheping Huang.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Moody's Investors Service says that Tencent Holdings Limited's (A1 stable) full-year 2019 results are slightly ahead of Moody's expectations, and support the company's A1 issuer and senior unsecured ratings. "We expect that Tencent will continue to benefit from revenue diversification and generate positive free cash flow to support its investment needs over the next 12-18 months, while maintaining a prudent financial discipline and credit profile that's commensurate with its A1 ratings, " says Lina Choi, a Moody's Senior Vice President.

(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterTwitter Inc. Chief Executive Officer Jack Dorsey returned from a trip touring African startups ready to go back.He said in a Twitter post last week that he’ll spend three to six months somewhere on the continent next year. Dorsey had spent much of November meeting with startups and people in the tech industry in South Africa, Ethiopia, Nigeria and Ghana.But investors have appeared less convinced of the executive’s intentions over the following days. Twitter’s shares have declined since Dorsey announced his plans -- down about 2.4% since Nov. 27 -- and his other company, payments firm Square, has fallen almost 4% compared to a 1.3% drop in the S&P 500 Index.The continent is one of the fastest growing regions for tech adoption thanks to a young population and an emerging middle class. People there have become early users of new technology, such as payments apps. Funding of African startups more than doubled last year to $1.16 billion, mainly driven by fintech investments, according to a report from venture capital firm Partech Partners.Dorsey’s Square fits in well with Africa’s embrace of mobile payments, though the company doesn’t currently have an office there.According to the GSMA industry association’s report this year, Sub-Saharan Africa is the region with the highest growth in wireless adoption, with a large number of jobs and economic growth tied to mobile. African leaders are also working to establish the world’s largest free-trade zone, the African Continental Free Trade Area, which would cover a market of 1.2 billion people. The deal is set to kick in next year.Read more about the African trade dealJack Ma, the co-founder of Chinese tech company Alibaba Group Holding Ltd., said last month that African entrepreneurs will find countless opportunities in e-commerce, logistics and e-payments as the continent prepares for the start of a the deal.Some large companies from the continent have started to go public. African e-commerce platform Jumia Technologies AG listed in New York this year at a value of more than $1.9 billion. South African giant Naspers Ltd. spun off its Dutch technology investment unit, Prosus NV, in September.To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nate LanxonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterNaspers Ltd. unlocked $10 billion of value for shareholders through the separate listing of its internet businesses, and with that done is now focusing on bulking up in online food deliveries.For years, Naspers has been trying to reduce a gap between its share price and the combined value of its assets. It split off these investments, including a 31% stake in Chinese tech giant Tencent Holdings Ltd., into a new unit called Prosus, which listed its stock in Amsterdam in September. The aim of the European listing was to attract foreign investors who cannot buy into emerging-market companies.Before the listing, Naspers’s internet businesses were trading at a discount of about 44% to their net asset value, a gap which narrowed to about 37% as of Wednesday’s closing prices, the company said in an email. That’s the equivalent to $10 billion “of value unlock.”Bob Van Dijk, chief executive officer of both companies, is scouring the globe looking to replicate Naspers’s blockbuster investment in Tencent. Naspers put $34 million into the Chinese company in 2001. That investment is now worth about $126 billion. Naspers, based in Cape Town, owns about 74% of Prosus and operates newspaper businesses.As part of that effort, he’s making a major bet on online food delivery. Through Prosus, he’s vying with Takeaway.com to acquire U.K. online food-delivery company Just Eat. Prosus is also backing other players in the sector, such as India’s Swiggy and iFood.“We get to see what happens in the online food delivery business in more than 40 markets,” Chief Financial Officer Basil Sgourdos said in an interview. The plan is to get any meal to a customer within 30 minutes and at roughly the cost of preparing it at home.Investments in TechnologyThe firm has spent $2.5 billion in investments in the food industry, from which it is making an internal rate of return of 30%. “We want to change the way people eat every day, that requires investment in technology, logistics and food preparation from our side,” the CFO said.Naspers on Friday reported core headline earnings from continuing operations of $3.80 a share in the six months through September, up from $3.53 a year earlier. Prosus, which provided results for the first time, generated $1.05 a share using the same adjusted profit measure, up 6.1% from a year earlier.Naspers shares are up 17% year-to-date, giving the company a market capitalization of about $67.9 billion. Prosus shares have slumped 16% since their September listing, valuing the Naspers unit at about $112.6 billion.(Updates with company comment in third, CFO starting in sixth paragraph.)To contact the reporter on this story: Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.netTo contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Vernon Wessels, Jacqueline MackenzieFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- Abu Dhabi’s sovereign wealth fund Mubadala is placing a bet on the growing demand for food delivery platforms with an investment in Spanish startup Glovo.Mubadala was the lead investor in Glovo’s 150 million euro ($167 million) funding round closed Wednesday, according to a statement, bringing its valuation to over $1 billion. Other backers in Barcelona-based Glovo included Drake Enterprises, Lakestar and Idinvest, all of which were already investors.This was the third round in which Glovo raised more than 100 million euros over the past 17 months, as it seeks to bolster its position in the booming food delivery sector by expanding into new markets and increasing its software development teams. Glovo operates in 26 countries.Investors are flocking to delivery companies, as consolidation unfolds across the globe. On Dec. 13, Delivery Hero SE acquired South Korea’s Woowa Brothers Corp for $4 billion, while rival Takeaway.com NV is in a bidding war with Naspers Ltd. spin-off Prosus NV for British delivery app Just Eat Plc.Over the past year, Glovo drew attention from rivals including Uber Technologies Inc. and Deliveroo. The Spanish startup has also been weighing the possibility of holding an initial public offering, people familiar with the matter have said.Like a number of its rivals, Glovo is not solely focused on food delivery, but is also open to other types of products and is rolling out so-called darkstores from which it services groceries and other products to clients. The company has seven in four cities and plans to open 100 by 2021.To contact the reporter on this story: Rodrigo Orihuela in Madrid at rorihuela@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nate LanxonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Prosus NV Chief Executive Officer Bob van Dijk is on to something big with his bid for Just Eat Plc, and he isn’t going to let it get away easily.The giant Naspers Ltd. spinoff officially filed its hostile offer for Just Eat on Monday, going up against both a unanimous rejection from Just Eat’s board, and a rival bid from Takeaway.com NV that was supposed to close by the end of the year.“In terms of opportunity, the food space is very, very, very large,” Van Dijk said in an interview prior to the bid. It’s “probably the largest opportunity I’ve run into in my lifetime.”Read more about the rival bids for Just Eat here.Just Eat would be a key piece in building out Prosus’s take out empire. Begun in 2013 with a $2 million investment in Brazil’s iFood, since 2016 it has invested about $2.8 billion in the sector. The company also has holdings in India’s Swiggy and Germany’s Delivery Hero SE, but it doesn’t want to stop there.An acquisition of Just Eat would result in a combined presence in more than 50 markets, and a number one position in 40 of those, according to Prosus. In Brazil, the deal would combine with Just Eat’s existing stake in iFood. Prosus is giving investors until Dec. 11 to accept the 710 pence per share deal.Prosus is keen to sell the idea that its food investment companies all get along rather than cannibalize each other. Swiggy CEO Sriharsha Majety said in an interview prior to Prosus’ bid for Just Eat that his team will sometimes hold calls with other Prosus companies if they think they solved a similar problem in a more effective way. Similarly, Fabricio Bloisi, chief executive of Movile, which owns iFood, said he was inspired by how Swiggy built kitchens where restaurants cook meals exclusively for delivery orders.Last year, Prosus sent a task force of as many as 40 people to Brazil to help iFood develop a new artificial-intelligence strategy, helping the company reduce prices by predicting where and when people will want a certain dish.If it succeeds in acquiring Just Eat, Prosus plans to make significant investments in product innovation, technology and delivery capabilities to ensure the delivery company maintains its market position.“Just Eat’s under investment in the sector has lead to them losing market share, and having its share price under pressure,” Van Dijk said in a conference call on Monday. “We have been speaking to shareholders on how the business is doing and what the long-term potential is - and the investment required to take it there.”Read about Just Eat’s latest earnings report here.Takeaway.com’s selling point is that it actually knows how to run a food delivery startup, rather than just owning one. Both the management of Just Eat and Takeaway.com are betting that their combined experience in turning a profit -- in an industry scattered with loss-making startups -- will help convince shareholders that it can fight off sizable rival startups that may also join forces.The fight over Just Eat comes amid an increasingly competitive landscape around the world for services that pick up or prepare meals and deliver them to customers’ front doors. Increased smartphone adoption, as well as innovations in mapping, logistics and other technologies have driven down the costs of online food delivery and helped catapult growth in the sector in recent years.Still, margins can be tight and startups are going up against tech giants including Uber Technologies Inc. to strike deals with the most popular restaurants and keep customers happy.While some Just Eat investors have complained about both the 710 pence-per-share cash offer from Prosus and Takeaway’s all-stock offer, currently valued at about 627 pence, neither company has indicated that they’d raise the bid.For now, it’s down to the shareholders to make up their mind. Aberdeen Standard Investments, which holds about 5% of Just Eat, said that Prosus needs to increase its offer by 20%. The investor also wanted Takeaway to increase its bid. Eminence Capital, which holds about 4%, in September said Takeaway’s bid undervalued Just Eat and that it planned to vote against that deal.“I can fully understand that the current cash values of both our and the competing offer aren’t particularly appealing to the Just Eat shareholders, and seem to be quite far removed from the fair value of Just Eat,” Jitse Groen, CEO of Takeaway.com, said in a statement posted on the company’s website on Monday. “We do however believe that the agreed merger ratio between Just Eat and Takeaway.com is appropriate.”(Updated to reflect time of interview.)\--With assistance from Loni Prinsloo.To contact the reporter on this story: Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Amy ThomsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- Takeaway.com NV is set to declare final victory in the five-month takeover battle for U.K. food-delivery company Just Eat Plc, people with knowledge of the matter said.Investors holding more than half of Just Eat stock have indicated they’ll agree to Takeaway’s all-stock bid, which values the company at about 6 billion pounds ($7.8 billion), according to the people. The preliminary tally includes those who plan to formally tender in the coming days, the people said, asking not to be identified because the information is private.Takeaway’s proposal requires a majority of shareholders to accept in order to be successful. Crossing the 50% threshold would mean the bid, which has been recommended by the Just Eat board, has prevailed over a rival cash offer from Prosus NV.Takeaway said Dec. 19 it had acceptances and commitments from investors holding 46.07% of Just Eat stock. Investors have until 1 p.m. London time on Jan. 10 to tender their shares.Just Eat has been urging investors to accept the Takeaway bid, which will merge the two European food delivery companies and give the combined firm the scale to take on the likes of Deliveroo and Uber Eats. Shares of Just Eat were down 0.5% at 9:24 a.m. Monday in London, while shares of Takeaway were unchanged. Representatives for Just Eat and Takeaway declined to comment, while a representative for Prosus said she couldn’t immediately comment.Takeaway announced an all-stock bid for Just Eat in late July valuing the British company at about 731 pence per share. Prosus, a spinoff from South African media giant Naspers Ltd., countered with a cash offer in October.After a rejection from Just Eat, Prosus publicly raised its bid twice before Takeaway announced its final offer in December of about 916 pence per share. Takeaway’s proposal has won support from shareholders including Aberdeen Standard Investments, which said the stock deal would let it maintain exposure to the fast-growing online food delivery market through the combined entity.(Updates with Monday share movement in fifth paragraph)\--With assistance from Natalia Drozdiak.To contact the reporter on this story: David Hellier in London at dhellier@bloomberg.netTo contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Nate LanxonFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.

(Bloomberg) -- Takeaway.com NV and Prosus NV haven’t started throwing egg rolls at each other, but they aren’t far off.Prosus, a $114 billion technology investment vehicle spun out of South Africa’s Naspers Ltd. in September, announced a hostile bid last week for British food delivery company Just Eat Plc, challenging an offer from Takeaway that was due to go through by the end of the year.With shareholders having to choose between two very different deals -- a cash bid from Prosus or a merger with Amsterdam-based Takeaway that would combine the two companies into a European food-delivery giant -- the battle is turning ugly. The meeting where investors will formally vote on a takeover deal isn’t until December 4, but meanwhile Just Eat’s shares are trading well above both companies’ latest offers as investors anticipate a bidding war.At the heart of the brewing food fight is the increasingly competitive market for services that pick up meals from restaurants and deliver them to customers. Giants like Uber Technologies Inc.’s Uber Eats platform are going up against a proliferation of apps for a share of the fast-growing sector. Some competitors are being forced out. Amazon.com Inc.-backed service Deliveroo stopped its German operations in August saying it couldn’t afford to keep up with its “brilliant” service standard. Other players are consolidating.Complicating Just Eat investors’ choice is Takeaway’s sinking share price. Takeaway’s share-swap offer went from valuing Just Eat’s stock at 731 pence apiece, higher than Prosus’s current 710-pence bid, to about 612 pence on Tuesday as its shares declined. Just Eat ended the day at 748.40 pence in London, giving it a market value of about 5.11 billion pounds ($6.58 billion).“A cash offer at a 20% premium is better than an all-share offer,” Prosus Chief Executive Officer Bob van Dijk said in emailed comments. “It provides certainty to shareholders and shields them from operational execution risk.”Trouble is, Takeaway is falling at least in part because its second-largest investor, Delivery Hero SE, is in the process of selling 3 million shares, and Delivery Hero’s largest shareholder is Prosus. That has some Takeaway investors crying foul.“Amazingly, Prosus has actually offered a discount to the value of the Takeaway.com bid before Prosus’ own portfolio company began selling Takeaway.com shares in the open market,” said Alex Captain, founder and managing partner of Cat Rock Capital Management, which owns shares in both Just Eat and Takeaway and is fiercely in favor of the merger. The investor owns about 3% of Just Eat and 5.6% of Takeaway and said in a statement on Monday that the combination would create a company worth 1,200 pence per share by the end of next year.Delivery Hero, which lists Prosus Chief Operating Officer Patrick Kolek as the deputy chairman of its six-person supervisory board, has said that it made the decision to sell Takeaway shares independently. It said it had no knowledge of Prosus’s plan to buy Just Eat before the bid was announced. The company said it was instead trying to cash in on a 48% surge in Takeaway’s shares in the first eight months of the year.According to Prosus’s website, Kolek, as COO, is focused on aligning group strategy with company objectives, leading core business activities and strategic initiatives such as large acquisitions and divestitures.Takeaway has characterized the Prosus-Delivery Hero connection as a conflict of interest. On Monday, it called on Delivery Hero to abstain from voting on its offer for Just Eat in an upcoming shareholder meeting.In a statement on Monday, Delivery Hero declined to comment on how it will exercise its voting rights or the role of Kolek on its board, saying “We have been in consultation sessions with the UK authorities and (have) specifically done everything to be in line with all obliged and mandatory steps.”The U.K.’s Takeover Panel, which regulates acquisitions involving British companies, doesn’t plan to take any action since Delivery Hero is properly disclosing its trades, including describing itself as being in a presumed concert party with Prosus, a person familiar with the matter said. The U.K.’s Financial Conduct Authority, which monitors market abuse, declined to comment on whether it had been asked to investigate the Delivery Hero share dealings in the context of the Prosus offer.Prosus said in a statement Monday that it doesn’t “control Delivery Hero or its investment decisions.” It also said that “Prosus had not disclosed its interest in making an offer for Just Eat to Delivery Hero” before making the bid.Just Eat’s board has rejected the Prosus bid and recommended the merger with Takeaway, but shareholders are split.Winning over big shareholders will be key. At least 75% of Just Eat investors must vote for the Takeaway deal for it to be approved, according to the offer’s terms. The Prosus threshold is 90%, though the company can reduce it to 50% plus one share under certain conditions.Still, both offers have been called too low. Aberdeen Standard Investments, which holds about 5% of Just Eat, said that Prosus needs to increase its offer by 20%. The investor also wanted Takeaway to increase its bid. Eminence Capital, which holds about 4%, in September said Takeaway’s bid undervalued Just Eat and that it planned to vote against that deal.“We stand ready to consider fair offers from Prosus and any other interested buyers, but these offers must compete on a level playing field with the significant value delivered by a Takeaway.com merger,” said Cat Rock’s Captain.\--With assistance from Natalia Drozdiak and Stefan Nicola.To contact the reporters on this story: Amy Thomson in London at athomson6@bloomberg.net;David Hellier in London at dhellier@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Vidya RootFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- Tencent Holdings Ltd.’s revenue beat expectations after Covid-19 lockdowns propelled gaming sales to their fastest pace of growth since 2017, sending shares surging in Hong Kong.The WeChat operator’s revenue rose 26% to 108.1 billion yuan ($15.2 billion) after online gaming sales leapt 31% during the coronavirus-stricken March quarter, helping offset shrinking ad budgets and a record Chinese economic contraction. Shares rose as much as 4% Thursday, their biggest gain in more than a month.The numbers underscore how Tencent’s among the more resilient of China’s internet giants thanks to its bread-and-butter gaming division, which rode an upswell of spending from homebound players in the world’s largest gaming arena. But the company warned those gains could peter out as China returned to normality and went back to work, while global macro uncertainty may continue to depress spending by corporations on online advertising.Ad spending on “long-form video from multinationals has seen a substantial step-down,” Chief Strategy Officer James Mitchell told analysts on a conference call, adding those clients account for about half the business. “You should expect media advertising revenue to be under pressure in the second quarter of the year.”Tencent offered the first glimpse of how China’s giant internet industry fared during the pandemic. It gained more than $42 billion in market value since Covid-19 first broke out, defying a global market rout to outperform peers like Baidu Inc. and Alibaba Group Holding Ltd.A surge in social media and gaming traffic drew new ad revenue to help offset shrinking traditional online marketing budgets. Tencent’s total smartphone games revenue surged 64% during the first quarter, helped by the consolidation of Clash of Clans maker Supercell. Revenue at Tencent’s burgeoning fintech division slid from the previous quarter after merchants shut their doors, but began recovering from April as activities in China resumed.“It may be challenging for Tencent to sustain 1Q’s strong growth into the next quarter as the pandemic retreats in China and online game players return to work,” Bloomberg Intelligence analyst Vey-Sern Ling said. “Lingering industry and macro headwinds may also dampen ad sales ahead.”After the results, shares in major shareholder Naspers Ltd. and the entity that holds its internet assets, Prosus NV, rose more than 5% to a record.But longer term, the world’s largest game publisher is contending with renewed challenges from the likes of ByteDance Ltd. and Alibaba.While Tencent’s core online entertainment business must convince consumers to keep splurging on aging cash cows like Honor of Kings, rival ByteDance is luring users and advertisers away and into its viral social networks. It’s also preparing to enter hardcore gaming.It’s in cloud and fintech where Tencent faces possibly its fiercest battle with Alibaba. Parts of those units, which made up more than a quarter of the company’s revenue in 2019, are expected to bounce back over 2020 and resume driving its longer-term expansion. Alibaba-backed Ant Financial’s Alipay is also seeking to attract more merchants and transactions in part by replicating the lite-app model WeChat pioneered.Alibaba and ByteDance will also fight fiercely for online advertising, which remain vulnerable to economic shocks if Covid-19 persists.“WeChat’s Moments ads are really designed for big brands, and we see risk that they are cutting budgets under intense pressures on cash flows,” said Richard Kramer, an analyst at Arete.(Updates with shares from the first paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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(Bloomberg) -- Prosus NV hasn’t lost its appetite for food delivery, even after the e-commerce giant was defeated in a grueling $8 billion bidding war for U.K. firm Just Eat Plc.Takeaway.com NV last week declared victory in the battle for Just Eat, saying investors holding 80.4% of the shares had formally backed its all-stock bid and rejected a cash offer from Prosus. But the Naspers Ltd.- controlled company has alternative targets to pursue, according to head of ventures and food, Larry Illg.“We continue to look at lots of different options in this space,” Illg said in a phone interview.Prosus -- spun off by South African parent Naspers in September -- has targeted food delivery as a key market for investment as more people opt to order in meals rather than cook. The company also has stakes in Delivery Hero in Germany and India’s Swiggy alongside a controlling stake in iFood in Brazil.One option for further expansion could even see Amsterdam-based Prosus going back to the negotiating table with Takeaway, which is based in the same city. The new owner of Just Eat has said it will consider selling the British firm’s 33% stake in iFood, in which Prosus is the majority shareholder.Prosus would consider buying more of the Brazilian firm, though an additional investment would have to make financial sense and won’t be “something that we would do at all costs,” Illg said.“It’s strictly about the financials because it wouldn’t change anything about how we help manage the business,” he added.Illg’s comments come as food-delivery companies race to consolidate to withstand fierce competition from firms such as Uber Technologies Inc.’s Uber Eats and myriad other apps. Takeaway’s new combined company, listed in London, will become one of Europe’s largest food-delivery operations after the deal is completed.Grubhub Inc. last week said it “unequivocally” isn’t running a sale process, denying reports in The Wall Street Journal and New York Post that the U.S. firm is on the auction block. Meanwhile, Amazon.com Inc.’s attempt to purchase a minority stake in British food delivery startup Deliveroo has run into unexpected scrutiny from U.K. antitrust regulators who’ve opened an in-depth investigation into the deal.Asked about Grubhub or Deliveroo as possible investment targets, Illg declined to comment, but added Prosus isn’t fixated on pursuing deals in a specific location.“We’re not looking to color in white spaces on the map. It’s very opportunistic,” he said.To contact the reporter on this story: Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, John BowkerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg) -- Prosus NV, which listed in Amsterdam just last week, is splitting opinion among the first investment banks to cover the stock.While Jefferies rates the Naspers Ltd. tech-investments unit underperform, Bank of America Merrill Lynch recommends that investors buy the stock.Jefferies began coverage of Prosus, which owns a 31% stake in Chinese tech giant Tencent Holdings Ltd., with a price target of 61 euros, implying a downside of around 16% from current levels.Analyst Ken Rumph wrote in a note that there is “frustration” that while Naspers and Prosus have been good investors, there has been no return of any gains. While unattractive operations were spun off and the Dutch listing accessed more passive capital, the e-commerce disclosure remains “thin” for a public company, Rumph also said. He expects Prosus’s net asset value to be largely driven by Tencent.“After current index flows, we expect Prosus to trade back toward a wider discount as active investors realize they have an ambitious patient capital investor, not a value-maximizing wind-up on their hands,” he wrote in a note.Bank of America Merrill Lynch analyst Cesar Tiron is more optimistic, with his 97-euro price objective implying potential upside of 33%. Prosus offers exposure to “best-in-class” emerging-market internet assets, he wrote in a note.Cape Town-based Naspers carved out Prosus for a separate listing to attract a more global investor base and realize more value, while weakening the group’s dominance over the Johannesburg stock exchange.Prosus shares fell as much as 2.1% Monday and traded at 72.97 euros as of 12:47 p.m. Amsterdam time, with the retreat taking them 4% below their 76 euros debut level last Wednesday.Last week, Spin-Off Research began its coverage of Prosus with a buy rating and 99 euros price target.(Updates to add BofAML rating and analyst comments.)To contact the reporter on this story: Kit Rees in London at krees1@bloomberg.netTo contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, John Viljoen, Paul JarvisFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Prosus NV has raised its bid for U.K. food delivery firm Just Eat Plc as it tries to win over investors and beat out an offer from rival Takeaway.com NV.The technology investment company, spun out of Naspers Ltd., increased its cash offer by 4.2% to 740 pence per share, valuing Just Eat at about 5.1 billion pounds ($6.7 billion), Prosus said in a statement on Monday. Just Eat advised its investors to take no action while it evaluates the new bid.“A slightly higher derisory cash bid remains a derisory cash bid,” Jitse Groen, CEO of Takeaway.com, said in a statement. Just Eat’s management has been encouraging investors to vote for Takeaway’s all-share deal, which would give them scale and access to Takeaway’s technology, arguing that Prosus’s offer undervalued the company even as a slide in Takeaway’s share price pushed down the value of its all-stock offer. As of Friday, after a monthlong rally, Takeaway’s bid valued Just Eat shares at 710 pence each.Shareholders have until Dec. 27 to accept Prosus’s new offer. Prosus needs investors with more than 50% of shares to agree to the deal for it to go through.Investors have been holding out for more. Just Eat’s shares have been trading above both offers. The stock rose 5.8 pence to 782.8 pence at 10:44 a.m. in London on Monday. Takeaway shares fell 2.4% and Prosus declined 0.2% in Amsterdam.Aberdeen Standard Investments, which holds about 5% of Just Eat, said previously that Prosus needs to increase its offer by 20%. The investor also wanted Takeaway to increase its bid. Eminence Capital, which holds about 4%, in September said Takeaway’s bid undervalued Just Eat and that it planned to vote against that deal.Cat Rock Capital Management, which owns shares in both Takeaway and Just Eat, has been lobbying Just Eat holders to take the Takeaway deal and has said that the combination would create a company worth 1,200 pence per share by the end of next year. The firm said a Prosus cash bid should be 925 pence to compete with the Takeaway merger.“Prosus continues to dramatically undervalue Just Eat with its revised 740p per share offer,” Cat Rock said on Monday. “This revised Prosus offer is wholly inadequate and shows Just Eat shareholders that Prosus cannot muster a credible bid.”Prosus has size on its side. The $108 billion market cap technology investment vehicle was spun out of South Africa’s Naspers Ltd. in September. It has $5.4 billion in cash to help fund the offer and “sufficient financial resources to cover for its bid beyond current terms,” analysts at Jefferies Financial Group Inc. said in a note in clients. Still, the relatively modest raise, about 4.2% higher than its previous offer, indicates Prosus is being “careful not to overpay.”Prosus owns stakes in similar companies globally, including a 22% stake in German delivery company Delivery Hero, about 39% of India’s Swiggy and 55% of Brazil’s iFood.The firm announced its hostile bid in October for Just Eat, challenging the offer from Takeaway that was due to go through by the end of the year. The deal would be much more transformational for Takeaway, which has a market value of about $5.8 billion. Under that offer’s terms, Just Eat shareholders would own about 52% of the combined company.Takeaway has so far pushed back against increasing its bid for Just Eat. “I don’t want to be the idiot that runs into a ratio that doesn’t make any sense,” Jitse Groen, Takeaway’s CEO and founder said in November.(Updates with Just Eat, Takeaway statements, and with investor reaction)\--With assistance from David Hellier.To contact the reporters on this story: Amy Thomson in London at athomson6@bloomberg.net;Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.netTo contact the editor responsible for this story: Giles Turner at gturner35@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Fund reduces holdings in overvalued semiconductors, invests in aerospace and e-commerce Continue reading...

(Bloomberg Opinion) -- Tuesday’s dramatic hostile counter-bid for the British internet takeout company Just Eat Plc arrived almost fully baked. The assailant, the European offshoot of South African tech giant Naspers Ltd, is throwing the prospect of cash at Just Eat’s shareholders to persuade them to ditch an all-share merger deal with Dutch rival Takeaway.com NV.The new offer isn’t that tempting. It needs a big dollop of dessert to make it irresistible.Naspers listed the bid vehicle, Prosus NV, in Amsterdam last month and analysts had expected it to gatecrash. But the 4.9 billion pound ($6.3 billion) cash bid looks mean as far as takeovers go. It equates to a low premium of 12% above Just Eat’s price before the Takeaway.com talks emerged.True, the Prosus offer is superficially better than the Takeaway.com merger. The latter deal would give Just Eat shareholders just over half the combined company, roughly in line with the duo’s average relative market values in the three months before discussions leaked. The upside would be split almost equally between each side’s investors. But there wouldn’t be much to share. Takeaway.com envisaged just 20 million euros ($22 million) of cost savings annually after four years. The governance was a bit of a fudge with board seats handed to both sides.Moreover, Prosus’s premium is arguably higher than it looks. As Prosus points out, the internet sector’s shares have fallen in recent months. Takeaway.com is down 15% since the Just Eat talks emerged in July. If there were no negotiations and Just Eat shares had tracked its peer, its shares would be trading at about 540 pence. Prosus’s hostile offer adds 31% to that — that’s a more conventional-sized takeover top-up.But the offer still isn’t high enough. Many of Just Eat’s top shareholders are also invested in Takeaway.com. For them the precise terms of the existing merger plan don’t matter too much. They may have liked the idea of crunching their holdings into a single big player they could hold over the long term. Forgoing that opportunity by cashing out demands a better than average premium.With $5.7 billion of net cash and billions of dollars of listed holdings, Prosus can afford to go higher. Its offer ascribes Just Eat an enterprise value of 3.8 times estimated 2020 sales, as shareholder Cat Rock Capital Management LP notes. Takeaway.com’s trading multiple is 8.3 times, although its markets are less competitive.Just Eat’s expected 394 million pounds of operating profit for 2023 would indicate a 7% post-tax return for Prosus from the deal. That’s in line with the target’s cost of capital. Add cost savings and the returns would probably be higher, which would justify paying more.It’s hard to see how Takeaway.com, with a market value of just 4.5 billion euros, could outbid Prosus. Nor is it clear that another tech giant might want to wade in. But shareholders have leverage just from saying no. They should back their board in demanding more before recommending a full takeout.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Takeaway.com NV has changed the type of bid it’s making for Just Eat Plc to one that allows it to change the shareholder acceptance threshold down the line as it competes with Naspers Ltd. spinoff Prosus NV for the asset.Takeaway is moving from a “scheme of arrangement” to a conditional offer, the company said in a statement on Monday. The offer will be approved if investors holding 75% of Just Eat’s shares agree to it.The company’s previous offer would have given Takeaway full control of Just Eat if it got 75% of voting shareholders to agree to the bid. The new offer means that it can lower the threshold to anything above 50% of the company’s shares, potentially making it easier to get a deal done. But the strategy risks having investor holdouts who refuse to tender their shares.Read more about the bidding war here.The company is competing for the asset with Prosus, a technology-acquisition firm that was spun off from South African giant Naspers in September. Takeaway’s all-share bid for Just Eat has declined to about 617 pence per share from an original 731 pence per share value as its stock price fell in the last few months. That gave Prosus a window to make a 710 pence per share cash bid last month.To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nate Lanxon, Ben ScentFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Moody's Investors Service has assigned an A1 senior unsecured rating to Tencent Holdings Limited's proposed medium-term notes drawn under its USD20 billion global MTN program. "The proposed notes will further enhance Tencent's already strong liquidity position, and enable it to sustain steady growth in revenue and cash flow," says Lina Choi, a Moody's Senior Vice President.

(Bloomberg) -- Tencent Holdings Ltd. delivered disappointing earnings and warned about a difficult advertising environment in 2020, voicing caution about how a potential Chinese economic contraction might affect its sprawling businesses.China’s largest gaming and social media company reported lower than anticipated net income of 21.6 billion yuan ($3.1 billion) in the December quarter. Overall costs swelled 20%, underscoring how Tencent is spending to acquire content and snag new users to fend off hard-charging rival ByteDance Inc.Tencent’s lackluster results reinforced concern about the extent to which the Covid-19 pandemic will hurt its home market, following Alibaba Group Holding Ltd.’s warning that the coronavirus will deal a broad-based blow to the Chinese economy. Beijing released data on Monday that suggests the world’s No. 2 economy may contract this quarter for the first time since 1989, denting the consumer and marketing spending Tencent relies on for revenue growth.The “ads business is going through difficult times due to challenging macro conditions and competition. At this moment, it is hard to predict whether the strong momentum from the game business is going to offset the others,” said John Choi, head of China Internet research at Daiwa Capital Markets Hong Kong Ltd.Shares in Prosus NV, the entity controlled by Naspers Ltd. that serves as a proxy for Tencent, dived more than 7% in Amsterdam.Read more: Alibaba Warns Virus Having Broad Impact on Chinese EconomyOnline gaming revenue grew 25% -- the fastest growth of that business Tencent’s managed since the first quarter of 2018. Smartphone game sales increased 37% in the quarter. The company then picked up millions of new gamers during the coronavirus pandemic, which erupted from Wuhan in January. Yet it’s uncertain if those players will stay, and less so if they’ll spend: in-game purchases for marquee titles like Honor of Kings dwindled in recent weeks after China began to go back to work.The topline “is driven by stronger growth in the online games segment, which bodes well as the company navigates virus headwind in the coming quarter,” Bloomberg Intelligence analyst Vey-Sern Ling said.On Wednesday, Tencent said the outbreak was holding back its fast-growing cloud computing business by forcing clients to postpone spending. Convincing carmakers, luxury goods purveyors and other industries to buy ads would also be particularly challenging in 2020, Chief Strategy Officer James Mitchell warned. The coronavirus outbreak also hit its online payments business WeChat Pay after forcing the closure of stores, restaurants and other brick-and-mortar merchants across the country.“While it’s a difficult environment overall for advertising in China, we believe we’re well positioned to continue growing,” he told reporters.Read more: Virus Outbreak Dealt a Surprise Blow To This Tencent BusinessTencent is also wrestling with industry-specific issues. It must count on aging cash cows Honor of Kings and Peacekeeper Elite to sustain its pace of growth while it awaits Chinese government approval -- a process that’s become much stricter and slower -- for the commercial launch of potential smash hits like Call of Duty Mobile domestically. This week, the company finally kicked off sales of two popular Mario games for the Nintendo Switch console in China after getting the green light. Tencent’s also testing a Twitter-style video and content feed on its ubiquitous WeChat app to win back users from ByteDance.“Tencent’s fight against gravity will continue until it gets positive signals from China’s gaming regulators,” said Michael Norris, Shanghai-based analyst with AgencyChina. “Mobile titles like Dungeon & Fighter, League of Legends and Call of Duty Mobile could be a big boon for Tencent in 2020.”Read more: Tencent’s $127 Billion Rally Bolstered by Work-From-Home Masses(Updates with Mitchell’s comments in the seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.