South African media and e-commerce group Naspers is cutting its stake in Chinese internet giant Tencent Holdings (0700.HK) by up to 2 percent in a deal that could net the firm about US$11 billion.
Naspers plans to sell as many as 190 million Tencent shares via an accelerated book-build to raise money for its e-commerce business, Reuters reports.
The South African firm currently holds 33 percent stake in Tencent following an investment in the Chinese firm 17 years ago.
In 2001, Naspers made a US$33 million bet on Tencent, an investment that paid off tremendously as the Chinese company grew at breakneck speed and emerged as one of the world’s top internet firms.
The Tencent investment is now worth about US$175 billion, more than Nasper’s own market valuation.
Founded in 1915, Naspers has transformed itself from an apartheid-era newspaper publisher into a US$127 billion multinational with private equity-style investments in e-commerce platforms.
The company said on Thursday that it has no plans to reduce its Tencent holding further for the next three years.
“We believe Tencent is one of the very best growth enterprises in any industry in the world, managed by an exceptionally able team. However, we also want to fund the further development of some of Naspers’ core business lines,” chairman Koos Bekker said.
“We have no intention to sell any more shares and have publicly stated that we will not sell further Tencent shares for at least the next three years.”
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