Daily Reuters Tencent’s major stockholder takes traded $14.7 billion value of stocks in the Chinese communal broadcasting and betting giant, and will use the cash to capitalize in other development ventures.
Prosus (PROSY), a spin-off by South African media and internet asset firm Naspers (NAPRF), sold a 2% pale in Tencent (TCEHY) for HK$114.2 billion ($14.7 billion), the Chinese tech huge said in a Hong Kong Stock Exchange shaving on Thursday. Tencent, which stated a strong monetary year throughout the plague, is by far Nasper’s most positive asset.
The arrangement is the major block skill ever, giving to data earner Refinitiv. Block trades are classically decided directly amid big institutional investors somewhat than on community stock exchanges.
Tencent’s stock released 1.5% on Thursday in Hong Kong afterward the news. It has increased about 80% since Prosus was listed on the Amsterdam standard exchange in 2019.
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After conclusion of the deal, Prosus will remain Tencent’s single major stockholder, with 28.9%. But it will lose its regulatory stockholder status, which below Hong Kong citation rules is granted to savers who hold at least 30% of elective rights.
Prosus parent Naspers paid $32 million spinal in 2001 for a 46.5% stake in Tencent. Its residual stake is now worth $221 billion. It’s a return that is rivaled only by SoftBank’s (SFTBF) $20 million punt on Alibaba (BABA) in 2000.
The contract will give an important boost to Prosus’ cash reserves. The Amsterdam-based investment firm reported a net cash position of $4.3 billion late-night last year.
“Prosus intends to use the profits of the sale to upsurge its financial suppleness to capitalize in growth, plus for over-all corporate purposes,” Prosus said in a statement.
It also assured not to sell any additional Tencent shares for at least the next three years.
Tencent previous month posted a huge jump in profit for the fourth quarter of 2020, beating approximations. But the results were overshadowed by concerns of a growing government crackdown on Chinese tech companies.
Prosus, which mostly invests in customer internet companies, said last November that its trades have helped from development tendencies in that space, as the pandemic has faster digital transformation.
“The attention now is on rising the business and refining financial flexibility and giving ourselves the room to be able to deploy across multiple capital allocation chances,” Basil Sgourdos, financial director and executive director of Naspers, said in earnings call in November.
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