Tencent seeks up to $1.55B from Kuaishou stake sale

Tencent Holdings is seeking to raise as much as $1.55 billion by selling part of its stake in Chinese short-video platform Kuaishou Technology, according to a term sheet reported by Reuters on Monday.wtvbam+1

The sale is being conducted through Tencent Mobility, a unit of Tencent that holds over 506 million Kuaishou shares. The offering involves approximately 273 million Kuaishou Class B shares priced at HK$43.15 to HK$44.53 each, representing a discount of roughly 3.2% to 6.2% to Kuaishou's last close of HK$46.00 on Monday.gurufocus+1

A Fully Secondary Transaction

The deal is fully secondary, meaning Kuaishou itself will not receive any proceeds — the funds will go entirely to Tencent Mobility. The transaction is expected to price on Monday, with shares trading on Tuesday and settling on Thursday.wtvbam

Neither Tencent nor Kuaishou immediately responded to Reuters' requests for comment, which were sent outside regular business hours.wtvbam

Tencent's Broader Divestment Pattern

The sale follows a pattern of large-scale divestitures by Tencent in recent years. The company distributed $16.4 billion worth of JD.com shares to shareholders in late 2021, sold a $3 billion stake in Sea Limited in early 2022, and explored offloading its $24 billion position in Meituan later that year. More recently, Bloomberg reported in June that Tencent was in talks to exit stakes in several Japanese gaming studios.reuters+3

Recent Tencent-Kuaishou Dealings

The block sale comes just days after Tencent participated as one of the lead investors in a $2.8 billion fundraise for Kling AI, Kuaishou's artificial intelligence video subsidiary, contributing $200 million to the round. That deal valued Kling AI at $15 billion on a pre-money basis and diluted Kuaishou's ownership in the unit to approximately 68%.cnbc+2

Tencent has simultaneously been under financial pressure, with its Hong Kong-listed shares losing more than a third of their value since an October high, wiping out roughly $309 billion in market capitalization. The company has responded with aggressive buybacks, spending more than HK$9 billion in June alone.finance.yahoo+1