The group’s strategy of building online marketplaces in emerging market economies received an indirect validation through a transaction that valued the other part-owner of Zameen at ~$US1 billion. Our observations: ▪ Overnight it was reported that unlisted Emerging Markets Property Group (EPMG) had agreed to purchase the middle-eastern real estate portals operated by OLX, part of Naspers, the world’s largest operator of online classified marketplaces. ▪ In that deal Naspers led a US$150m capital raising that valued EMPG at more than US$1 billion. EMPG’s largest single asset is its 70% holding in Zameen, Pakistan’s dominant real estate marketplace. The remaining 30% of Zameen is owned by Frontier. ▪ It is not possible to calculate a clear look-through valuation of Zameen from this deal as EMPG owns a portfolio of real estate marketplaces across the Middle East and North Africa in addition to its Zameen holding. ▪ However, after applying generous valuations to other EMPG assets, the OLX deal appears to imply a valuation for 70% of Zameen of at least US$400m and possibly up to US$600m. This is considerably higher than Morgans’ former mid-point Zameen valuation (for 100%) of US$282m.
FDV Price at posting:
92.5¢ Sentiment: Buy Disclosure: Held
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