Naspers, the most valuable company on the JSE, has disputed media reports that it is in negotiations to sell its Chinese software and gaming giant Tencent.
Citing unnamed sources, the reports emanated from Asian media on Monday and alleged that Naspers is in talks with a group of investors led by CITIC of China to sell its entire Tencent stake.
Naspers subsidiary Prosus holds a 28% stake in Tencent worth $70-billion (R1.2-trillion) at the current exchange rate. The group has said it intends to sell the stake down gradually to fund a share repurchase programme.
In a statement, Naspers said the article that alludes to it selling its stake in Tencent is “speculative and untrue”.
“The group continues with its open-ended share repurchase programme announced in June this year [and] which is funded by the sale of [a] small number of ordinary shares in Tencent Holdings Limited held by the group regularly and in an orderly manner,” the statement reads.
“The Naspers board and Prosus board reiterate their continued confidence in Tencent’s long-term prospects and continue to believe that the share repurchase programme is in the best interests of Prosus, Naspers and their respective shareholders.”
Naspers investment in Tencent in the early 2000s has proven to have been an inspired choice. The company acquired 46.5% of Tencent for only $32-million in 2001 when the Chinese company was just a plucky start-up.
That stake, which has whittled down to 28% over the years, is now worth a mammoth $70-billion. The investment has also had its fair share of problems over the years.
Just last week, Naspers’ value on the JSE fell R130-billion after investors were spooked by Chinese President Xi Jinping’s decision to hand key economic posts to loyalists who back his zero-Covid strategy.
Investors fear that unleashing strict policy and laws can hamper the growth of tech giants, after the president began his third term as leader and packed that country’s Politburo standing committee with loyalists.
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