Tencent Mobility, which is part of Tencent Holdings, is lining up the sale of a significant block of shares in Chinese short-video company Kuaishou Technology, according to a term sheet seen by market participants.
The term sheet indicates the Tencent unit intends to place roughly 273 million Kuaishou Class B shares at an offer range of HK$43.15 to HK$44.53 per share. At those levels, the transaction would be worth about $1.50 billion to $1.55 billion.
Key elements of the proposed placement include:
- The offer price range equates to a discount of about 3.2% to 6.2% relative to Kuaishou’s last closing price of HK$46.00 on Monday.
- The sale is structured as fully secondary, meaning Kuaishou will not receive any proceeds from the transaction; the funds will go to Tencent Mobility.
- The timetable in the term sheet shows pricing on Monday, the first day of trading on Tuesday and settlement on Thursday.
Kuaishou operates one of China’s principal short-video and livestreaming platforms, according to its corporate descriptions. The listing of this block and the pricing mechanics were laid out in the term sheet reviewed by market observers.
Requests for comment sent outside regular business hours did not receive immediate replies from Tencent or from Kuaishou, according to the same sources. The term sheet also noted the U.S. dollar to Hong Kong dollar reference rate used for the valuation: $1 = 7.8428 Hong Kong dollars.
The proposed placement, if completed within the indicated price range and size, would see Tencent Mobility receive proceeds of roughly $1.50 billion to $1.55 billion from the disposal of the 273 million Class B shares. Because the sale is fully secondary, Kuaishou itself would not obtain any of those funds.
The term sheet sets out a concise execution schedule with pricing on Monday, trading beginning on Tuesday and settlement on Thursday, leaving a narrow window for market participants to digest the deal specifics before the block hits the market.
Details summarized:
- Shares offered: ~273 million Kuaishou Class B shares
- Offer range: HK$43.15 to HK$44.53 per share
- Implied proceeds to Tencent Mobility: about $1.50 billion to $1.55 billion
- Discount to last close: ~3.2% to 6.2% (last close HK$46.00)
- Nature of sale: fully secondary (Kuaishou receives no proceeds)
- Schedule: price on Monday, trade on Tuesday, settle on Thursday