Venture capital investment group Prosus NV has sold a 2% slice worth roughly $14.7 billion in Hong Kong-listed Chinese gaming and digital service conglomerate Tencent Holdings, the company announced Thursday in an exchange filing, lowering its stake to 28.9%.
This is the largest block trade ever made worldwide and the funds raised will be put towards new tech investments and offsetting debt, Holland-based Prosus said in a statement.
"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," Prosus CEO Bob van Dijk said.
The 191.89 million Tencent shares went for HK$114.1 billion ($14.67 billion), according to documents filed with the Hong Kong bourse, or roughly HK$595 per share - a 5.5% discount from the stock's price as of Thursday.
Prosus is majority owned by South African private equity group Naspers, a company known for making large block trades. In 2018, Naspers sold a 2% stake in Tencent for $9.8 billion, setting a record at the time for the largest single trade in the world.
Morgan Stanley, Goldman Sachs and Citigroup were all joint global coordinators on the deal.
Prosus' most recent financial reports for the first half of the year ending September 30 show a 29% increase in earnings, with strong gains from its Tencent stake relieving growing losses in other investments.
Indeed, the block trade comes in the wake of record fourth quarter profits at Tencent.
The Chinese conglomerate reported a 175% year on year increase in final quarter profits last month, beating analysts' predictions in the face of regulatory fines from mainland financial authorities.
Led by entrepreneur Pony Ma, Tencent owns the world's largest video game business while its WeChat app is home to the second largest mobile payment service in China. Financial records reveal that these sectors show no signs of flagging despite the ongoing global pandemic.
