/ 24 September 2023

Did Naspers’ chair lose patience with Bob van Dijk?

Day Three Of The World Economic Forum (wef) 2020
Bob van Dijk. Photo by Jason Alden/Bloomberg via Getty Images

An avid surfer, Bob van Dijk has braved the freezing swells of the North Sea over Christmas in his native Netherlands. He did so by choice and found it exhilarating, he told this reporter a couple of years ago. This week, in a very different way, Van Dijk was out in the cold again.

Naspers, the consumer-facing internet group he had still been chief executive of over the weekend, announced on Monday that Van Dijk would vacate the top job with immediate effect. Two jobs actually. He would also leave Naspers’ Amsterdam-listed subsidiary Prosus, the company said.

“We discussed it with Bob. After ten years, and at some point you hand over, and this is a good point for various reasons. So we agree about that,” board chair Koos Bekker told investors in a teleconference.

Van Dijk was not part of the call.

Bekker, of course, held Van Dijk’s position for 17 years until 2014, remodelling the South African publisher and media company Nasionale Pers into global technology giant Naspers. Before that he built a European pay-TV empire, after of course starting M-Net in his early thirties.

Bekker would always have been a tough act to follow. But it was harder still because a preferred successor had already been lined up. The untimely passing of Antonie Roux, a visionary long-time Naspers executive, created a vacuum at the group.

So Bekker stayed on for an extra year and then passed the baton (or chalice) to the man originally from Helmond in the southeast corner of the Netherlands.

Van Dijk had been part of Naspers for less than a year by then, running the ecommerce platform Allegro. Think of it as an eBay in Poland. Van Dijk had also spent time at eBay itself before that. And at Schibsted, an ecommerce business in Norway. His first job after completing a masters degree in economics, was as a management consultant at McKinsey.

Before Naspers, Van Dijk had never been a chief executive.

Bekker’s team had made the deal of the century by investing $32million in a Chinese tech startup called Tencent in 2001, watching that stake’s value grow to more than $100billion (yes, from million with an “m” to billion with a “b”). So, was Van Dijk’s job to find another Tencent, or to use the massive windfall from this Chinese venture to create a whole different Naspers?

Nearly a decade later, it is obvious that he did not succeed in the former, and he probably managed the latter, but not the way investors would have wanted.

The Naspers he found on day one, was the product of Bekker’s investment philosophy — throwing spaghetti at a wall and seeing what sticks. That was how his team had found and backed Tencent. It is also how they got involved in Eastern Europe’s Allegro and India’s Flipkart and Latin America’s Movile and OLX. 

Walls full of spaghetti are asking for a clean-up. So Van Dijk set about selling, buying, moving and organising a disparate portfolio of businesses into a compelling narrative. It reminds you of the way consultants build a slide deck for a client.

Van Dijk sold Allegro and he flipped Flipkart. He used the money to push deeper into online classifieds, the business he knew well from his time at eBay and Schibsted. He expanded it into a substantial business segment.

The numbers were big. Billions. And not rands, but US dollars. Notably, Naspers started reporting its results in the American currency not long after Van Dijk took over.

In a similar vein, he extended Naspers’ interests in food delivery. The group invested more into India’s Swiggy, Europe’s Delivery Hero and Brazil’s iFood. Although these companies sat on opposite sides of the world, operated in different languages and would be unlikely to interact with each other, Van Dijk’s team had no qualms about grouping them together as a food delivery business segment. 

In 2019, at a presentation in Johannesburg, he joked that he was a foodie and had eventually managed to convince the rest of the company to invest in food delivery.

He did the same with online payments and education technology.

And these four business segments or “verticals” could be neatly presented to investors and other stakeholders to explain what Naspers (and then Prosus) is.

Only, Naspers/Prosus was actually something else. It was defined by its Tencent stake.

Ask the analysts — in studying the company, they spend the overwhelming majority of their time following and analysing Tencent. The “verticals”, even with more than $20 billion spent on them in the past decade, just don’t move the needle.

The real irony is in how Van Dijk funded it all.

(John McCann/M&G)

In 2018, Naspers sold Tencent shares for the first time. The idea was to pay down debt at the ecommerce businesses. It was also the start of a rejigging that would lead to the listing of Prosus, still under Naspers control, on the Euronext bourse in Amsterdam the next year.

In 2021, more of Tencent was sold, again to plough into the four business segments, but also to buy back shares as a gaping discount was persisting between Naspers, Prosus and the value of its stake in Tencent. And last year, Van Dijk started an open-ended share buyback scheme, again to address the discount.

In between Naspers and Prosus did a share-swop to unlock value, but which probably achieved the opposite as the cross-holding added complexity.

Investment bankers certainly made a tidy sum from all the corporate machinations. But investors were not impressed, especially by the idea that Van Dijk would mint as much as R1.5 billion for his trouble.

“The investment community has for a long time been unhappy about the Naspers and Prosus leadership, which includes excessive remuneration that certainly was not deserved by the CEO and the management team,” says Asief Mohamed, Aeon Investment Management’s chief investment officer.

Is it a coincidence that Van Dijk’s tenure ended on the day the successful unwinding of the cross-holding structure was announced? Was it the mistake that cost him his job? Did the board say, ‘This is your mess, Bob, clean it up and go’? Who knows. Bekker has been known to lose patience with managers. For years at Naspers, his subordinates did things because Koos sê so (Koos says so).

But there is nothing in the company’s communication to indicate that the CEO was forced to go.

“When you decide on a transition it is best to execute that immediately,” Bekker remarked on the call. He said the aim was to avoid “pointless unhappy period” and that Van Dijk and the board agreed.

We’ll have to take his word for it.

More interesting clues lie in the words of Van Dijk’s successor in the interim. Chief investment officer Ervin Tu, who calls his board chair “Cooze”, will take the reins in the interim.

Tu only joined Prosus in 2021. Before that he was at tech investor Softbank and spent more than a decade at investment banking outfit Goldman Sachs.

On Monday, the caretaker CEO used the words “discipline” and “capital” in the same sentence three or four times.

He also laughed rather awkwardly when Bekker jokingly said, “Ervin, tell them how you will waste investors’ money”.

Sure, with all Van Dijk’s manoeuvring, Naspers’s share price more than quadrupled during his time at the company. You can’t help but wonder what the effect would have been had he done nothing at all. A surfer should know, you can’t make the waves, just ride them.