Prosus announces accelerated offering of Tencent shares
Prosus N.V. has announced its intention to sell, through its subsidiary MIH TC Holdings Limited, up to 191 890 000 shares in Tencent Holdings Limited (Tencent), equal to 2% of Tencent's issued share capital, reducing its stake from approximately 30,9% to 28,9%.
In a statement Prosus said it intends to use the proceeds of the sale to increase its financial flexibility to invest in growth, plus for general corporate purposes.
Prosus also announced a commitment not to sell any further Tencent shares for at least the next three years.
Prosus Chair Koos Bekker said, “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 ecommerce. “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.”
The parcel of Tencent shares will be offered to institutional investors globally, subject to customary selling restrictions. Citigroup, Goldman Sachs and Morgan Stanley have been appointed Joint Global Coordinators and Joint Book Runners to manage the transaction.
According to the companies, books are open now and are expected to close prior to the Hong Kong opening.
The Joint Global Coordinators reserve the right to accelerate closing of the books, it added.
In October 2020 Prosus announced its intention to acquire up to US$5-billion in total of Naspers and Prosus shares.
ITWeb reported that according to a statement from the company, the move is a further step to crystalise value for shareholders.
According to ITWeb, the announcement follows earlier actions such as the unbundling of MultiChoice Group and the listing of Prosus on Euronext Amsterdam last year.
An excerpt from the report reads: “The purchase of Naspers and Prosus shares also represents a meaningful investment in the group’s strong Internet portfolio, says Prosus, adding that it is regarded as a good use of capital, given full market valuations evident in consumer Internet mergers and acquisitions (M&A) and the group’s sizeable consolidated discount to net-asset-value (NAV).”