Prosus, a major shareholder in tech giant Tencent, has announced plans to repurchase its own shares while at the same time, reducing its Tencent holding. Prosus is listed on the Euronext Amsterdam Exchange in the Netherlands.
As part of its ongoing share buyback plan, Prosus will deposit 96 million Tencent shares it owns into the Hong Kong Central Clearing System in certificate form, allowing orderly market trading of Tencent shares.
The implication is that Prosus will continue to liquidate its holding in Tencent shares to raise funds to buy its own shares. Following the news, Tencent's stock price fell as much as 4.8 percent.
As part of its buyback plan, Prosus repurchased 1,800,000 shares of its own stock from April 3 to 6 at an average price of 71.13 euros (US$77.73, 535.4 yuan), for a total consideration of approximately 127 million euros.
Prosus plans to move about HK$36 billion (30 billion yuan, US$4.6 billion) Tencent shares into the clearing system, based on Tuesday’s closing price.
In June last year, Naspers, the parent company of Prosus, announced that it would initiate a long-term buyback. The company currently holds 27 percent of Tencent.
To counter the downward pressure, Tencent began its own buyback plan in 2022, repurchasing a total of 107 million shares for HK$ 34 billion.
As of the end of Q3, Tencent repurchased 12.4 million shares this year for HK$4.6 billion.
