prosus, and spin off
South African media and internet investment firm Naspers said Monday it will cut its huge stake in Tencent to fund a share buyback program.
shares fell more than 4%
on Tuesday in Hong Kong after the news. On Monday, prosus (PROSI)
as well as Naspers (NAPRF)
Shares rose 16% and 23% in Amsterdam and Johannesburg, respectively.
Amsterdam-based Prosus is Tencent’s largest shareholder with a 28.8% stake worth about 128 billion dollars.
This is not the first time Prosus has sold Tencent shares in recent years. In April last year, Prosus sold a 2% stake in Tencent for $14.7 billion, the largest block deal to date. (Block deals are usually arranged directly between large institutional investors rather than on public stock exchanges.)
Then Prosus promised that it would no longer sell Tencent shares for at least the next three years.
Since then, Tencent’s shares have fallen 40% due to crackdowns on technology in China and a weakening economy. This crash wiped out its $295 billion market capitalization.
On Monday, Prosus said it would use the proceeds from the public sale of shares to buy back its own shares and shares in Naspers.
“It will also rebalance our asset base towards high-growth non-Tencent assets,” said Bob van Dijk, CEO of Prosus and Naspers. statement
The company said it would start selling a small amount of Tencent shares “regularly and in an orderly manner,” but did not specify how much.
On Monday, Tencent said the sale of Prosus would represent only a small percentage of its stock’s average daily trading volume. exchange application.