(Yicai Global) Jan. 13 -- DHC Software's stock price jumped to a four-year high today after the Chinese industrial internet firm said that Tencent Holdings will become its third-largest shareholder.
DHC's shares [SHE: 002065] rose 4.7 percent to CNY12.17 (USD1.76) by the noon break. That is 32 percent more than the Shenzhen-based tech giant's offer price.
A unit of Tencent will buy 157 million shares, paying CNY9.2 apiece, in a CNY1.4 billion (USD205.8 million) deal, the Beijing-based target company said in a statement on Jan. 10. DHC's shares have been trading above that price since late November.
Meanwhile, Tencent will withdraw its holdings of DHC's parent Donghua Chengxin Computer Technology Development. Tencent invested CNY1.3 billion to purchase a 25 percent stake in Donghua Chengxin in May 2018, and thereby became an indirect shareholder of DHC with a 5 percent stake.
The transaction will help strengthen the pair's long-term strategic partnership that already spans the fields of healthcare, financial and smart cities, DHC added.
Tencent will appoint a board director as part of the deal.
Editor: Emmi Laine