Tencent pulls back after $ 14.7 billion placement at Naspers unit prices

Tencent actions Holdings fell in Hong Kong after Naspers’ unit, Prosus, rated its placement of Chinese internet giant’s stock at the high end of the marketed range, raising HK $ 114.2 billion (14 , US $ 7 billion; Rand 14 billion).

Tencent fell 2.5% in pre-trade. Amsterdam-listed Prosus valued the deal at HK $ 595 / share, which is a 5.5% reduction from Tencent’s last close of HK $ 629.50, under the terms of the deal . The sale is the second-largest block transaction in the world on record, following a sale of $ 20.7 billion of American International Group shares in 2012.

The e-commerce group sells a 2% stake in Tencent, reducing its stake to just under 29% while remaining the largest shareholder in the Chinese company, he said in a statement on Wednesday. He was trading 191.89 million Tencent shares at HK $ 575 to HK $ 595 each.

The deal will more than quadruple Prosus’ cash reserves by $ 4.6 billion at the end of September. This is helping to increase Prosus’ coffers at a time when e-commerce is booming, with the coronavirus pandemic increasing online demand for everything from food shopping and delivery to education. Prosus already has assets in these sectors alongside payment services and has been looking for further acquisitions for a long time.

“The group has some really interesting investments in the e-commerce space in India, so maybe that’s where some of the capital is going,” said Nick Kunze, senior portfolio manager at Sanlam Private Wealth. “They now have the war chest to implement on the opportunities.”

Mega deal

The fundraiser could also give Prosus another chance to close a mega-deal, having missed two high profile buyouts in the past 18 months. The company lost an $ 8 billion battle to buy British food group Just Eat from early last year and was beaten in July in a $ 9 billion auction for the eBay classifieds by Norwegian rival Adevinta.

Prosus shares were down 4.6% at the close on Wednesday in Amsterdam. The company is profiting from one of the best venture capital deals ever. Naspers, the Cape Town-based parent company, invested just $ 32 million in Tencent in 2001, when it was an obscure internet company. The shares are now worth around $ 239 billion.

While the move made Naspers Africa’s most valuable company, its market capitalization of around $ 105 billion is well below the value of the Tencent holding company. The creation of Prosus was in part designed to reduce this reduction, but the Amsterdam-based company is also eclipsed by the size of the stake in the creator of WeChat.

In 2018, a surprise sale of stake by Naspers contributed to a two-day loss of more than 9% of Tencent’s shares, wiping out a market value of $ 48 billion.

Prosus has pledged not to sell Tencent shares for at least the next three years, the company said. Naspers sold a similarly sized stake in 2018, a year before the shareholding and most of its other businesses split into what is now Prosus. – Reproduced by Swetha Gopinath and Julia Fioretti, (c) 2021 Bloomberg LP

Now read: Naspers unites Prosus to sell R18 billion Tencent stake

Tencent pulls back after $ 14.7 billion placement at Naspers unit prices

Source link Tencent pulls back after $ 14.7 billion placement at Naspers unit prices

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