Dutch-based technology investment company Prosus plans to sell a 2 percent stake of Tencent, worth about HK$117 billion at current prices, to fund growth ventures.
Prosus, majority owned by Naspers of South Africa, said the sale would lower its stake in Tencent to 28.9 percent from 30.9 percent.
The move underlines the size of Prosus' sTencent stake, which it said it had committed not to reduce further in the next three years.
"The proceeds of the sale will increase our financial flexibility, enabling us to invest in the significant growth potential we see across the group, as well as in our own stock," chief executive Bob van Dijk said in a statement.
The company said it had informed Tencent of its intention before Wednesday's announcement. This came three years after Tencent's share price slashed by nearly half in 2018 within six months of Naspers cutting its stake from 33 percent to 31 percent.
However, the drop in share price three years ago came partly due to Tencent's own mobile phone business being greatly hindered, said Kenny Ng, a securities strategist at Everbright Sun Hung Kai.
He expected that the share sales would not affect Tencent's operation and that it would be a chance for middle-to-long-term investors to accumulate shares should there be a significant drop in Tencent's stock.
Tencent fell 3.75 percent yesterday. The share had risen over 7 percent before the Easter holiday.
In other news, Standard Chartered Bank (Hong Kong) expects Hong Kong's stock market may dive to as low as 25,000 points in the second quarter.
The Hang Seng Index fell over 260 points to 28,674 points yesterday.
Alibaba (9988) fell even though Berkshire Hathaway vice chairman and Daily Journal chairman Charlie Munger, who criticized Jack Ma for being "arrogant," revealed that Daily Journal purchased 165,320 shares of Alibaba's American depositary shares in the first quarter.
In other news, the Hong Kong dollar fell to a one-year low of 7.7804 against the US dollar.