Source: Finance Association
① How much has Prosus's shareholding ratio in Tencent Holdings declined to? ② Why is the majority shareholder Prosus still reducing its holdings? ③ Will Prosus reduce its Tencent holdings during the year?
Yesterday, news from Prosus, the majority shareholder of Tencent, attracted market attention and led to a marked decline in Tencent's stock price today.
According to the latest regulatory documents, Prosus, a major shareholder of Tencent and a Dutch subsidiary of South Africa's Naspers Group, sold 513,500 shares of Tencent common stock on December 7, falling to 24.99%.
Affected by this news,$TENCENT (00700.HK)$Shares are down nearly 2%.
First, let's take a look at how sacred Naspers is. According to the company's official website, Naspers is a South African press group. The company bought 46% of shares from Li Zekai, IDG Capital, and Tencent's founder team for 32 million US dollars in 2001. This investment made Naspers a lot of profit, creating a myth that profits 4,361 times in '18.
In fact, since Prosus announced a reduction in its holdings in June last year, its shares in Tencent have been gradually declining. According to easy-to-disclose data, since September last year, Prosus's shareholding ratio has dropped from 27.99% to 25.99% today. Documents up to December 13, 2022 show that Prosus's shareholding in Tencent is 26.99%, which means that Prosus will reduce its holdings in Tencent by about 2 percentage points in 2023.
Judging from the chart above, Disclosure Easy did not announce the 24.99% reduction in Prosus holdings yesterday. This is because the disclosure records are lagging behind, but Prosus's latest announcement has already revealed this progress.
Why did Prosus announce a reduction in holdings?
According to a press release issued by Prosus, the majority shareholder of Tencent's holding, and Naspers on June 27 last year, the content is that Prosus and Naspers have begun a long-term, open repurchase plan, and will raise the funds required for the repurchase plan by selling Tencent shares held by Naspers Group on the market in an orderly manner.
Furthermore, Naspers Group expects the number of Tencent shares sold each day to account for a small portion of the average daily trading volume of Tencent shares.
What is even more noteworthy is that Naspers also announced as early as April 2021 that Prosus has entered into a placement agreement with the placement agent. The details relate to the sale of a total of 1918.9 million shares at a total cost of HK$114.175 billion, accounting for about 2% of the total number of shares issued. Furthermore, Prosus announced that it will not reduce its holdings further for at least three years, and the arrangement is in line with its long-term confidence in the company's business potential.
Will Prosus reduce its Tencent holdings during the year?
According to early media reports, Prosus expects its share of Tencent shares to be reduced by 2 to 3 percentage points each year to around 24%-25% by the end of this year.
Judging from the current 24.99%, it is currently in the 24%-25% range. Whether they will continue to reduce their holdings in the future is still unknown.