Tencent’s largest shareholder, Naspers, on Wednesday announced plans to raise some HK$110 billion (US$14.1 billion) by selling a 2% stake in the Chinese technology giant.
South Africa-based Naspers will sell the 2% stake through its Dutch-based subsidiary, Prosus, lowering its shares to 28.9%, according to a document filed by the company in Johannesburg.
The sale would start on Thursday, with the price range set at HK$575 to HK$595, a discount of 5.5% to 8.7% to Wednesday’s trading price of HK$629.5, the document said.
Prosus has committed not to sell any further Tencent shares for the next three years, the company said.
“Prosus intends to use the proceeds of the sale to increase its financial flexibility to invest in growth, plus for general corporate purposes,” the company said, adding that COVID-19 had accelerated growth in its business sectors including online food ordering, electronic payments and fintech, and e-commerce.
Naspers had committed not to sell Tencent shares for three years after a previous sale in 2018. The commitment expired late last month.
Some Hong Kong-based fund managers interviewed by Apple Daily last month anticipated that it was highly likely Naspers would proceed with another sale of Tencent shares.
Grand View Asset Management’s investment strategy director, Kakei Lam, told the newspaper on Wednesday that the upcoming sale would have a limited negative impact on Tencent’s prices in view of the company’s recent performance.
Tencent’s prices fell from HK$405 to HK$249 when Naspers sold some of its shares in 2018. The drop was partly due to investors’ concerns that further sales were in the pipeline, said Eugene Law, business development director of China Galaxy International Securities.
While a fall of similar magnitude was unlikely this time, Tencent’s prices would still be plagued by mainland Chinese authorities’ supervision over monopolistic practices, Law said.
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