Prosus NV sells 2% stake in Tencent Holdings Ltd for $14.7 billion

In a significant development, Tencent Holdings Ltd said, technology investor Prosus NV has sold 2% of its stake for $14.7 billion in what is said to be the world’s largest-ever block trade.

In a regulatory filing with the Hong Kong Stock Exchange Tencent said, Prosus has sold 191.89 million shares for $14.67 billion (HK$114.1 billion), as a result of which its stake has come down to 28.9%.

The selling price was at a 5.5% discount to Tencent’s Wednesday closing price of $HK629.50.

Tencent’s stock is up by 10% so far this year.

With the news reaching the market, its Hong Kong listed shares slumped by 2.5% on Thursday.

Prosus did not respond to requests for comments on the pricing.

The block trade surpassed the previous record set by Naspers in 2018 when it had sold its 2% stake in Tencent for $9.8 billion.

“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,” sid Prosus CEO Bob van Dijk in a statement.

Prosus, which also invests in online food delivery platforms, classified marketplaces and digital payments businesses, reported a 29% increase in its second quarter report showing an increase in its core earnings at $2.2 billion.

“We expect the news to viewed cautiously until there is more clarity on how the funds will be redeployed,” said analysts at Renaissance Capital in a note to client.

Morgan Stanley, Citigroup Inc, and Goldman Sachs Group Inc were joint global coordinators for the sale.

($1 = 7.7849 Hong Kong dollars) ($1 = 0.8425 euros)

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