Prosus to reduce Tencent stake


Prosus to reduce Tencent stake


Published Date: 2021-04-08 | Source: Stephen Gunnion | Author: Stephen Gunnion

Prosus to reduce Tencent stake

A three-year lock-up since Naspers last reduced its stake in the Chinese internet and gaming giant recently expired.

Prosus plans to reduce its stake in Chinese internet and gaming giant Tencent in a move that will give it more financial flexibility to invest in its growth businesses. It will sell up to almost 192 million shares, equal to 2% of Tencent's issued share capital. The stake is worth about $15-billion (R218-billion)

The consumer internet group, which was listed in 2019 and unbundled by parent Naspers, said the disposal would reduce its stake in Tencent to 28.9% from 30.9%. Following the sale, it committed not to sell any further Tencent shares for at least the next three years. A similar commitment by Naspers, when it raised $9.8-billion through the sale of a 2% stake in Tencent in March 2018, recently expired.

Prosus said Tencent was one of the world's best growth enterprises, consistently delivering value since it listed in 2004.

Prosus said the Covid-19 pandemic had accelerated digital transformation across the group's growth sectors, mainly online classifieds, food delivery, payments and fintech, education and ecommerce. It said it saw opportunity in scaling these growth models further to build increasingly valuable global businesses. Through its Ventures unit, it said it would continue to back innovative businesses and entrepreneurs, hoping to create future consumer internet players.

The parcel of Tencent shares would be offered to institutional investors globally, subject to customer selling restrictions. Citigroup, Goldman Sachs and Morgan Stanley were appointed joint global coordinators and joint bookrunners to manage the transaction.

Prosus fell 4.1% to R1,622.32 yesterday while Naspers closed 5% down at R3,485.


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