Tencent’s Biggest Investor Cashes In on Pandemic Rally – The Wall Street Journal
JOHANNESBURG— Tencent Holdings Ltd. ’s largest shareholder raised $14.6 billion by selling stock in the Chinese internet and videogaming giant, cashing in on one of the most lucrative technology bets in history after the pandemic gave a huge boost to the sector.
Internet conglomerate Prosus NV said Wednesday it had cut its stake in Tencent to 28.9% from 30.9% to increase its financial flexibility to invest in growth ventures. It is also the latest attempt to narrow a persistent gap between the company’s market value and that of its stake in Tencent.
In 2001, Prosus parent Naspers Ltd. , Africa’s largest-listed company, paid $34 million for a one-third stake in Tencent before it went public. Hong Kong-listed Tencent, the world’s largest videogame company by revenue and operator of the popular WeChat do-everything app, is now China’s most valuable publicly listed company with a market capitalization equivalent to $775.9 billion.
“Our belief in Tencent and its management team is steadfast, but we also need to fund continued growth in our core business lines and emerging sectors. Plus create some headroom for acquisitions,” Prosus Chairman Koos Bekker said in a statement.
Prosus said it priced its Tencent stock at 595 Hong Kong dollars a share, the equivalent of $76.43. That was the top of an earlier range and represented a 5.5% discount to Tencent’s Wednesday’s closing price. Even before the offering’s launch on Wednesday, investors had lined up to buy about three-quarters of the shares, people familiar with the matter said. In all, Prosus sold about 192 million shares.