Alibaba Group gets US$1.6b investment
In a deal that may well sweep aside recent speculation about a public listing, Alibaba Group received a US$1.6 billion tender offer for shares from an investor group led by DST Global, Silver Lake and Chinese private equity firm Yunfeng Capital.
According to a person familiar with the transaction, Alibaba shareholders, which include the firm's eligible employees and option holders, are each allowed to sell up to 35 per cent of their vested holdings to the investor group.
The tender offer, which started yesterday, has valued the Hangzhou-based e-commerce giant at more than US$32 billion. It is expected to close within six weeks.
'This liquidity programme will allow our people to focus on growing our business and continuing to create value,' said Jack Ma Yun, the founder, chairman and chief executive of Alibaba.
His comment appears to provide the latest signal from the management that an initial public offering will not be explored anytime soon.
Alibaba has more than 23,000 employees in China, India, Japan, South Korea, Britain and the United States. Its operations include mainland online shopping market leader Taobao Mall, China Yahoo and Hong Kong-listed Alibaba.com.
US internet firm Yahoo and Japan's Softbank Corp have fully diluted shares of 39 per cent and 30 per cent, respectively, in Alibaba.
The new investor group, which also includes Singapore-based Temasek Holdings, would have a stake of less than 5 per cent if its tender offer is fully subscribed, according to technology blog AllThingsD. DST Global and Silver Lake will cede voting control to Alibaba management.
'We believe the high-quality investors making commitments to this important [liquidity] programme share our mission and philosophy,' said Ma, a co-founder of Yunfeng.
DST Global, founded in 2009 by Russian billionaire Yuri Milner, has been an active financier in major internet enterprises, including microblog pioneer Twitter, social-networking titan Facebook and mainland online retailer 360buy.com.
US firm Silver Lake last year made significant investments in Shanghai-based clean-technology firm Nobao Renewable Energy Holdings and digital marketing specialist Allyes Online Media Holding.
'We have developed a strong relationship with Alibaba's management over several years, and this commitment reflects our confidence in the company's leadership position and the growth of the e-commerce market in China,' said Kenneth Hao, a Silver Lake managing director and head of its Asia operations.
Shares of Alibaba.com rose 2.79 per cent to close at HK$6.99 yesterday on news of the tender offer to its parent firm.
the number of registered users of Alibaba.com, which is listed in Hong Kong and is the only listed unit of the Alibaba Group