Tencent’s biggest backer trims stake

TENCENT’S biggest investor plans to sell down its stake in a fresh blow to the Chinese tech giant as it reels from Beijing’s online crackdowns and a slump in internet stocks.

Dutch internet conglomerate Prosus said it would reduce its 29pc stake in Tencent, which owns Wechat and a string of online video games and other internet services.

Prosus, which is listed in Amsterdam and majority owned by South Africa’s Naspers, said the sales will fund share repurchases. The Dutch company has been hit by a broad sell-off of tech companies as well as the war in Ukraine.

One of its most valuable assets was Avito, Russia’s biggest classified adverts website, which was valued at around $6bn (£5bn) before Vladimir Putin’s invasion of Ukraine and the resulting sanctions hammered the Russian economy. Naspers bought a 46.5pc stake in Tencent in 2001, in what has become one of the most successful investments of all time. The stake is worth around $135bn but both Naspers and Prosus, which Naspers spun off in 2019, have been publicly valued below the value of their Tencent holdings.

Selling the stakes represents an effort to return the value of the Chinese giant to the companies’ shareholders.

However, Tencent shares have more than halved since February of last year after the Chinese government launched a series of crackdowns on the country’s tech giants, particularly on online video games.

Global confidence in technology stocks has also slumped since the start of the year amid rising interest rates and a global squeeze on disposable income.

Shares in Prosus soared by 15.7pc, while Naspers rose by 23pc. Tencent shares dropped by 1.3pc.

The companies said the sell-offs would be gradual and that they would continue until the companies are no longer discounted by the market.