Tencent’s Biggest Investor Cashes In on Pandemic Rally

JOHANNESBURG— Tencent Holdings Ltd. ’s largest shareholder is selling up to $14.7 billion worth of stock in the Chinese internet and videogaming giant, cashing in on one of the most lucrative technology bets in history after the pandemic gave a huge boost to the sector.

Internet conglomerate Prosus NV said Wednesday it plans to cut its stake in Tencent to 28.9% from 30.9%, selling about 192 million shares, to increase its financial flexibility to invest in growth ventures. It is also the latest attempt to narrow a persistent gap between the company’s market value and that of its stake in Tencent.

In 2001, Prosus parent Naspers Ltd. , Africa’s largest-listed company, paid $34 million for a one-third stake in Tencent before it went public. Hong Kong-listed Tencent, the world’s largest videogame company by revenue and operator of the popular WeChat do-everything app, is now China’s most valuable publicly listed company with a market capitalization equivalent to $775.9 billion.

The Tencent shares that Prosus is selling were marketed to investors at HK$575 to HK$595 a share, equivalent to $73.94 to $76.51 a share, representing a 5.5% to 8.7% discount to Tencent’s Wednesday closing price, according to people familiar with the matter. Even before the offering’s launch, investors had lined up to buy about three-quarters of the shares, the people said.

Prosus said Tencent understands and supports its intention. A spokesperson at Tencent declined to comment further.

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