Tencent Plans to Sell a Stake in Singapore’s Sea for Up to $3 Billion

Tencent has bought $3 billion of shares in Singaporean on-line gaming and e-commerce company Sea because it seeks funds for new initiatives and philanthropic efforts to support wealth redistribution.

The Chinese web big priced 14.5 million shares in Sea at $208 every, the underside finish of an indicative vary, in accordance to phrases of the deal obtained by Bloomberg News.

The supply worth represents a low cost of 6.9% to Sea’s shut on Monday. The stock fell as a lot as 9.4% in early New York buying and selling on Tuesday and has slumped greater than 44% from a excessive hit in October.

Less than a month in the past, Tencent introduced a plan to hand out greater than $16 billion of Inc. stock as a one-time dividend in an effort to divest most of its stake in China’s No. 2 on-line retailer. The shock transfer was seen as being in response to Beijing’s push to curb anticompetitive habits and open up closed ecosystems.

Tencent is decreasing its holding in Sea to 18.7%, it mentioned in a assertion. The divestment will present the Shenzhen-based company with “resources to fund other investments and social initiatives, while retaining a substantial majority of its stake in Sea and continuing to benefit from the company’s future growth,” it mentioned.

In August, Tencent doubled the quantity of money it’s setting apart for social accountability applications to 100 billion yuan ($15.7 billion) as Beijing forges forward with its “common prosperity” marketing campaign that features earnings regulation and redistribution.

Chinese tech shares have been battered by a year of regulatory motion, spanning sectors together with on-line training, gaming and meals supply, slowing progress at tech stalwarts like Tencent and Alibaba Group Holding Ltd.

Tencent has agreed not to promote additional Sea shares for the subsequent six months, the phrases present.

Goldman Sachs Group Inc., Bank of America Corp. and Morgan Stanley are arranging the sale.

Prosus (majority owned by Naspers) is Tencent’s largest shareholder, with a 29% stake.

© 2022 Bloomberg L.P.

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