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Tencent share: Naspers spin-off Prosus sells $ 15 billion stake

Prosus (BORING), a spin-off by a South African media and internet investment firm Naspers (NAPRF), sold a 2% stake in Tencent (TCEHY) for 114.2 billion Hong Kong dollars (14.7 billion dollars), the Chinese The tech giant said in a filing on the Hong Kong Stock Exchange on Thursday. Tencent, which reported a strong financial year during the pandemic, is by far Nasper’s most successful investment.

The deal is the biggest block exchange ever, according to data provider Refinitiv. Bulk transactions are usually arranged directly between large institutional investors rather than on public exchanges.

Tencent stock fell 1.5% in Hong Kong on Thursday after the news broke. He won about 80% since Prosus was listed on the Amsterdam Stock Exchange in 2019.

Once the transaction is completed, Prosus will remain Tencent’s largest shareholder, with 28.9%. But it will lose its controlling shareholder status, which under Hong Kong listing rules is granted to investors with at least 30% of the voting rights.

Prosus’ parent company, Naspers, paid $ 32 million in 2001 for a 46.5% stake in Tencent. His remaining stake is now worth $ 221 billion. It’s a comeback that is matched only SoftBank (SFTBF) $ 20 million on Ali Baba (BABA) In 2000.
The transaction will give a significant boost to Prosus’ cash reserves. The Amsterdam-based investment firm reported a net cash position of $ 4.3 billion at the end of last year.

“Prosus intends to use the proceeds of the sale to increase its financial flexibility in order to invest in growth, as well as for general corporate purposes,” Prosus said in a statement.

He also promised not to sell Tencent shares for at least the next three years.

Last month, Tencent saw a huge increase in profits for the fourth quarter of 2020, beating estimates. But the results have been overshadowed by fears of a growing government crackdown on Chinese tech companies.
Prosus, which invests primarily in consumer internet companies, said last November that its business had benefited from growth trends in that space as the pandemic accelerated digital transformation.

“The focus is now on growing the business and improving financial flexibility and giving us the opportunity to expand into multiple capital allocation opportunities,” said Basil Sgourdos, CFO and Director Naspers executive, during a call for results in November.


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