Naspers and international subsidiary Prosus have denied the group is in talks with a Chinese investment company to sell its entire stake in internet giant Tencent.
On Monday, Asian Tech Press published an article claiming that a Citic-led group — a Chinese state-owned investment company — was in talks with Naspers to buy all the Tencent shares it owns.
“The article is speculative and untrue,” said the group.
Naspers’s share price shot up as much as 13% in early trade on the JSE as Tencent rallied in Hong Kong. By the close of trade, Naspers was up 8.22% to R2,056.35, while Prosus had gained 8.51%.
The stock market in Hong Kong halted the losses of recent times as investors turn their focus to what the US Federal Reserve will say in its latest interest-rate announcement later this week.
Tuesday’s market move helped the Cape Town-based group to recoup most of the losses that sent shock waves through local equity markets on October 24.
The Naspers-Prosus cross-holding entity saw its stock fall off a cliff on Monday last week, slashing more than R432bn off its market value after an election result in China triggered worries that the world’s second-largest economy may tilt away from free markets.
This week’s rumours continue to drive speculation that Naspers is looking to get rid of its stake in Tencent as a number of other international investors have begun to exit their investments on the Chinese mainland.
That said, Prosus continues to sell down its stake in Tencent in an effort to fund an ongoing share buyback.
In June, the Amsterdam-listed unit went back on its word not to sell more of Tencent’s stock for three years, saying it needed the money to fund the buyback programme.
The open-ended, long-term programme (the size of which has not been disclosed) is the latest attempt by Prosus, alongside its parent, to crush a stubbornly wide gap between their market capitalisation and the value of their underlying assets.
Prosus, which has a market cap of R1.71-trillion, now owns about 28% of the technology giant.
While looking to close the discount, its move to sell down the Tencent stake is seen as being part of a broader trend of early international backers of Chinese firms now cashing out their investments, having made billions in profit.
In August, SoftBank said it unloaded billions of dollars in shares in e-commerce pioneer Alibaba. In September, Warren Buffett’s Berkshire Hathaway further trimmed its stake in China’s biggest electric-vehicle maker, BYD.
Update: November 1 2022
This story has been updated with additional information.
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