UPDATED: Naspers losing “24-bagger” CEO Koos Bekker; names 41yo ecommerce specialist as successor

By Alec Hogg*

One of South Africa’s great entrepreneurs, Koos Bekker (61), is stepping down as the R530bn Naspers group’s CEO at the end of next month. The board announced this morning Bekker will be succeeded by Bob van Dijk (41), the group’s most senior ecommerce chief. Bekker will also step off the directorate – but only for the next year. After his second sabbatical, he will return to Naspers in April 2015 to succeed outgoing chairman Ton Vosloo who turns 77 in September.

During the next year Bekker will “travel widely and research where the group’s next spurt of growth will come from, once ecommerce has reached maturity.” His latest five year contract with Naspers expires at the end of this month. He took a similar sabbatical in 2007 and says: “I couldn’t have wished for a more interesting life. Now I hope to travel to places like Seoul and San Francisco where the future is being manufactured, and see if there are new technologies we should be trying out. Plus experience a few oddball spots. When Ton steps down, I’ll rejoin the board, hopefully with fresh ideas.”

Van Dijk (41), who joined Naspers in August 2012 to run subsidiary Allegro, has an MSc Econometrics from Erasmus University Rotterdam (cum laude), plus an MBA from Insead in France (Dean’s List). Among other experience, he headed up eBay Germany, that group’s biggest market outside the US, and was COO of Schibsted’s Classifieds. He lives in the Netherlands with his wife Tina, a senior finance executive, and two young daughters. He is a keen sportsman and speaks five languages. Naspers chairman Ton Vosloo says: “In view of our strong development focus on ecommerce, the board believes that Bob has the skills to lead us into the next phase of our growth.”

Bekker’s brilliance transformed Naspers from a relatively small South African newspaper and book publisher into the world’s biggest media group outside the US and China. His journey began with a research paper he wrote while at Columbia University in the US. That sparked the idea of bringing pay-TV to his homeland. After convincing Naspers of its merits, he led a young team that established South Africa’s first pay-TV channel, M-Net, in 1985. It was one of the first such businesses outside the US. At that point then unlisted Naspers, which was a 26% shareholder in M-Net, had an implied market value of R24m. Today the pay-TV business, now called Multichoice, operates in 48 countries across Africa serving 7m households.

Koos Bekker struck gold for the group again in 1991 when the MultiChoice team he led launched mobile phone operator MTN. Today MTN is the biggest mobile operator in Africa and one of the largest companies on the Johannesburg Stock Exchange with a market cap of R370bn. In 1997 Bekker replaced Ton Vosloo as CEO of Naspers itself, at which point the now listed group had a market cap of R5.6bn. During 17 years under Bekker’s leadership, Naspers’ value has risen almost 100-fold. After Naspers sold the European pay-TV operations he was running, Bekker agreed to return as Naspers CEO and be based in South Africa only on the condition his entire remuneration be paid in share options, not cash. That decision, and the enormous value added under his watch, has turned Bekker into one of the wealthiest South Africans. At the current share price, Bekker’s 16.4m Naspers shares are worth just under R21bn.

The surge in the group’s value came as a direct result of Bekker’s determination for the group to embrace the Internet once he took hold of the CEO’s reins in October 1997. A year after moving into the hot seat he took Naspers into ecommerce. What turned into his biggest home run came in May 2001 with a 46.5% investment, for $32m, in a fledgling, loss-making Hong Kong-based internet business called TenCent, which then employed 30 people. It has since been described as the smartest private equity investment ever.

Tencent, which listed on the Hong Kong Stock Exchange in June 2004, nw employs 24 000, is the fourth most valuable internet company in the world behind Google, Facebook and Amazon, with a market capitalisation of R1 500bn. Naspers itself is 8th – see table below. Its stake in TenCent was diluted post listing to 34%, which is worth worth R510bn. That means on a see-through basis, today’s investors in Naspers are getting its substantial other assets – including Multichoice, Mail.ru (Russia), Abril (Brazil) – for virtually nothing.

Although the most spectacular, Koos Bekker’s TenCent bet was not the only way he has added massive value for Naspers shareholders.

Naspers continues to invest heavily in an ambitious effort to become a global player in classifieds and transactional ecommerce. Under his watch it has become one of the world’s leading multinational media groups with substantial interests in Europe and South America as well as China and Africa. Internal calculations show that excluding dividends, R1 invested in Naspers when M-Net was formed in 1985 is worth R5 700 today. Again with dividends ignored, R1 invested in October 1997, when Koos Bekker became Naspers CEO, would be worth R24 today.

* Alec Hogg is the founder and publisher of Biznews.com

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