Naspers unit Prosus to sell 2% Tencent stake
Naspers unit Prosus today announced its intention to sell, through its subsidiary MIH TC Holdings, up to 191 890 000 shares in Tencent, equal to 2% of Tencent's issued share capital, reducing its stake from approximately 30.9% to 28.9%.
Prosus says it intends to use the proceeds of the sale to increase its financial flexibility to invest in growth, plus for general corporate purposes.
In 2001, Naspers made an early, successful investment of $32 million, in Tencent. As of 2018, Naspers had approximately a 31% stake in Tencent, becoming its largest shareholder, and Africa's biggest public company.
According to Companies Market Cap, as of April 2021, Tencent has a market cap of $806.12 billion, making it the world’s seventh most valuable company by market cap.
This means Prosus’s 2% sale in Tencent will be worth about $15 billion (R218 billion).
Prosus also announced a commitment not to sell any further Tencent shares for at least the next three years.
Prosus chairman Koos Bekker says: “Tencent is one of the world’s best growth enterprises. It has consistently delivered value since listing in 2004. Prosus’s commitment to Tencent remains steadfast. Through the sale of this small portion, Prosus intends to fund continued growth in our core business lines and emerging sectors, as well as allow for complementary acquisitions.
“We have informed Tencent of our intention, which is understood and supported by Tencent. We commit that we will not sell further Tencent shares for at least the next three years in line with our long-term belief in the business.”
Prosus CEO Bob van Dijk highlighted that the COVID-19 pandemic has accelerated digital transformation across the group’s growth sectors, mainly online classifieds, food delivery, payments and fintech, education and e-commerce.
“The proceeds of the sale will increase our financial flexibility, enabling us to invest in the significant growth potential we see across the group, as well as in our own stock.”
In a statement, Prosus says the parcel of Tencent shares will be offered to institutional investors globally, subject to customary selling restrictions.
It notes that Citigroup, Goldman Sachs and Morgan Stanley have been appointed joint global co-ordinators and joint book runners to manage the transaction. Books are open now and are expected to close prior to the Hong Kong opening. The joint global co-ordinators reserve the right to accelerate closing of the books.