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On June 27, Tencent Holdings announced that the company’s largest shareholder, Naspers (South African Newspaper Group), will sell its shares in the company. Naspers Group expects that the number of company shares sold every day will account for a small percentage of the company’s average daily trading volume of shares. part.
The specific content of the announcement shows:
Prosus, the company’s major shareholder, which is majority-owned by Naspers, and Naspers have commenced a long-term, open-ended repurchase program to their respective public shareholders for the shares in their respective share capitals and will be ordered in an orderly manner. The sale of Naspers Group’s shares in the company on the grounds raises funds for the buyback program.
It is reported that Naspers Group expects the number of company shares to be sold each day to account for a small fraction of the average daily turnover of the company’s shares. For example, if Naspers Group executed a buyback program in the past three months, subject to European regulatory restrictions, the company’s shares sold per day would not, on average, exceed the average daily trading volume of the company’s shares by approximately 3-5%.
After the announcement, Tencent Holdings dived in the afternoon and turned down for a while, after rising more than 4%.
The largest shareholder behind Tencent
According to the data, Prosus is a holding company used to hold the international Internet assets of Naspers (a multinational listed media group), a South African investment company, which was spun off by Naspers.
Naspers is the largest shareholder of Tencent through MIH TC Holdings Limited, a subsidiary of Prosus that it controls, and has been the largest shareholder since then. As early as 2001, when NIH, a subsidiary of Naspers in South Africa, purchased a 46.5% stake in Tencent, the price was only US$32 million. Since then, the value of the shares it held was as high as more than US$300 billion, making it more than 12,000 times. In the past 20 years, Tencent’s business has expanded from QQ to WeChat, advertising and even online games. Its stock price has risen from HK$3.7, which was listed on the Hong Kong Stock Exchange in 2004, to nearly HK$400 today.
As of now, Prosus’ shareholding ratio in Tencent is 28.8%, and the number of direct holdings is 2.77 billion shares.
As the main shareholders of Tencent, Prosus and Naspers have reduced their holdings twice in 2018 and 2021, and have received huge returns. It is worth mentioning that although the South African Press Group is the largest shareholder, it has no actual decision-making and leadership rights, so it only participates in dividends in the long run.
According to public information, affected by multiple factors such as the epidemic, the global investment of Prosus and Naspers has been challenged, and the market value of the secondary market of the two companies has also shrunk significantly.
The difference between this reduction and the previous two is that the reduction method will be promoted by continuous small reduction. Some analysts believe that this is an attempt by Prosus and Naspers to ease their own pressure as much as possible on the basis of minimizing the impact on Tencent.
According to the announcement, Naspers expects that the average number of Tencent shares sold per day will not exceed 3-5% of Tencent’s average daily trading volume.
The reduction of major shareholders’ holdings has a considerable impact on Tencent’s stock price. Looking back at history, in March 2018, Prosus, which has invested in Tencent for 17 years, reduced its holdings in Tencent for the first time. At that time, it also reduced its holdings by 2%, or about 190 million shares. At the time, Naspers also pledged not to sell further shares for at least the next three years. Shares in Tencent nearly halved in the next six months after news of the 2018 reduction broke.
Naspers completes the sale of JD.com shares with total proceeds of approximately US$3.67 billion
Today Naspers also announced that it has completed the sale of JD.com shares obtained from Tencent on June 24, achieving a total gain of approximately US$3.67 billion. The sale is not subject to any preconditions.
At the end of December 2021, Tencent issued an announcement to distribute its approximately 460 million Class A ordinary shares of JD.com to its shareholders. Tencent shareholders who received JD.com shares in this distribution will become new shareholders of JD.com.
After this dividend, Tencent’s shareholding in JD. Through the equity allocation, Prosus, in which Naspers has a majority stake, gets about 4% of JD’s shares through its subsidiary MIH TC Holdings.
Source: Securities Times
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