Thank you for asking, I had hoped someone would. We are in a similar (albeit much, MUCH smaller) situation, so we have thought about it. A lot. Here follows a thread.
1. Firstly, one has to recognize that the market is generally right about things, and it pays to listen to it. So what is the market saying when an investment holding company trades at a big discount to its core asset.?
2. Probably it thinks you are destroying value in your non-core, "growth" assets, and/or your overheads are too high, and/or you are not properly disclosing your tax (or any other contractual) liabilities.
3. Assuming reasonable overheads, and fully disclosed liabilities, to get the market to recognize the value of your non-core growth assets, unbundling the core asset is by far the easiest and most cost effective way.
4. It creates huge value for shareholders, as they now hold the full value of the core asset, plus some sort of positive value on the non-core assets. There is no leakage in the system.
5. The problem is how to fund the growth of the non-core assets once the cash flows form the core asset are no longer available.
6. Again the answer is obvious: A good management team will use the extremely cheap funding from debt and equity markets that is currently available for growth assets to do so. There are many examples of growth companies doing exactly that: Tesla, Netflix etc etc
7. And if public markets aren't willing, venture capitalists are able to help. As long as these non-core assets are actual growth assets with attractive business models. And Naspers keeps telling us that is exactly what is in their ex - Tencent basket.
8. This strategy is so simple, one can rightly ask why is it not being done? The answer lies in management incentives. If you unbundle your core asset, you are left with a smaller asset base, that might not be able to afford your incentive scheme. Your lifestyle gets compromised.
9. Also management has to come out from under the shade of the core asset, and do the hard work of creating value in the sun, so to speak. Not always a comfortable place. It can get quite sweaty.
10. And that is why management are so susceptible to the siren song of the investment bankers, who can always come up with some sort of (fee-generating) corporate scheme that purports to "unlock value" but seldom does.
11. All these schemes do is generate even more leakage from the system. And the market reflects this in an even bigger discount to NAV, a la Naspers' current situation.
