Tencent says Meituan stake-sale report not accurate

TENCENT Holdings chief strategy officer James Mitchell said a report that the company intends to sell all or much of its US$24 billion stake in food delivery giant Meituan was incorrect. 

Reuters reported on Tuesday that the social media giant has engaged financial advisers in recent months on ways to execute the sale of a roughly 17 per cent stake, in order to appease state authorities that have been working to curb the influence of tech industry leaders. 

The report “is not accurate,” Mitchell told analysts on a post-earnings conference call.

Since last year Tencent has been disclosing plans to sell shares in investees such as e-commerce giant JD.com, as Beijing punishes the country’s tech giants for anticompetitive behaviour, including maintaining closed ecosystems that favour certain firms at the expense of others. The trend has weighed on the stocks of companies with Tencent ownership. 

In Wednesday’s(Aug 17) earnings report, the company reiterated a view expressed in the first quarter that the regulatory environment in China is becoming more supportive. Still, it reported its first-ever quarterly revenue decline after online advertising sales fell by a record, and the company has adopted a strategy of paring loss-making activities as it focuses on profitability. BLOOMBERG