On April 7, a big news shook the capital circle: Prosus, the largest shareholder of Tencent, will sell 192 million shares of Tencent Holdings, equivalent to 2% of Tencent’s issued share capital. If calculated based on Tencent’s latest share price, the cash shed will amount to 120.8 billion Hong Kong dollars, or about 101.5 billion yuan.
The above news was spread during Hong Kong stock trading hours and was confirmed after the bell.
Affected by this, Tencent’s Hong Kong share price once plunged nearly 5% during the day and finally closed down 3.75% at HK$629.5 per share, with a single-day market value evaporating HK$235 billion, or about RMB197.5 billion. Tencent ADR once fell nearly 10% during the day.
It is worth noting that the last time (March 2018) when Prosus announced a reduction in its holdings, Tencent’s share price also plunged 5% that day and subsequently experienced a six-month-long adjustment.
Prosus is understood to be a holding company used to hold the international internet assets of South African investment firm Naspers (South African newspaper). As of now, Prosus holds 30.9% of Tencent through its subsidiary MIH, with the market value of its holdings reaching HK$1.87 trillion, or about RMB 1.57 trillion.
Dumping 100 billion yuan shares, Tencent’s first largest shareholder intends to reduce its holdings again
On April 7, Prosus, Tencent’s largest shareholder, announced that it plans to sell up to 192 million shares of Tencent (00700.HK) through its subsidiary MIH TC Holdings Limited (MIH), accounting for 2% of Tencent’s issued share capital. Upon completion of the transaction, Prosus’ stake in Tencent will drop from 30.9% to 28.9%.
Prosus said it plans to use the proceeds from the sale of these shares to boost the company’s financial flexibility to further invest in growth companies, as well as for general corporate purposes.
Prosus said the epidemic has accelerated the digital transformation of all of the group’s growth sectors, including food distribution, payments and financial technology, education and e-commerce, and Prosus sees opportunities to continue scaling these business models. In addition, through its venture capital arm, Prosus will continue to support innovative companies and entrepreneurs.
Prosus said the Tencent shares will be offered globally to institutional investors. Citigroup, Goldman Sachs and Morgan Stanley have been appointed as joint global coordinators and joint bookrunners to manage the deal.
Prosus is understood to be a holding company used to hold the international Internet assets of South African investment company Naspers (South African newspaper), which was spun off by Naspers and listed in the Netherlands in 2019, and the stake in Tencent Holdings held by Naspers was taken over by Prosus. Prosus’ main assets include investments in Tencent, Mail.ru and DeliveryHero.
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