Tencent sales hurt Naspers shares

NASPERS shares fell more than 7 percent on the JSE after the global media and entertainment group said it was planning to sell up to 190 million shares it held in Tencent Holdings.

Naspers said it expected to raise about R125.85 billion through the sale of the Tencent shares.

It said the transaction would be equal to 2 percent of its total issued share capital in Tencent.

After the completion of the sale, Naspers’ shareholding in Tencent will be reduced from 33.2 percent to 31.2 percent.

“The funds will be used to reinforce Naspers’s balance sheet and will be invested over time to accelerate the growth of our classifieds, online food delivery and financial technology (fintech) businesses globally and to pursue other exciting growth opportunities when they arise,” Naspers said.

The announcement caught the market by surprise, leading to the fall of Naspers shares to R3 127 a share by yesterday afternoon, down from Tuesday’s closing price of R3 459 a share. The shares eventually closed 4.59 percent lower at R3 300.

Naspers has not sold any Tencent shares since it invested in 2001, as it considered the stake to be one of the very best growth enterprises in any industry in the world.

“Tencent understands and supports the intention to sell. Naspers will not sell further Tencent shares for at least the next three years, in line with its longterm belief in Tencent’s business,” the group said.

Naspers said the shares would not be made available to the general public, but would be offered to institutional investors globally, subject to customary selling restrictions.

Bank of America Merrill Lynch, Citigroup and Morgan Stanley have been appointed joint global co-ordinators and joint bookrunners to manage the transaction.

The group said books were open and expected to close prior to the Hong Kong market opening and the global co-ordinators reserve the right to accelerate closing of the books.