Alibaba in talks with London bourse after Hong Kong snub

PUBLISHED : Tuesday, 22 October, 2013, 3:27am
UPDATED : Tuesday, 22 October, 2013, 5:34pm

Alibaba, China's No 1 e-commerce firm, is considering a London listing as part of its potential US$15 billion share-sale plan.

Senior executives at the firm met UK officials during last week's visit to Hong Kong by London Mayor Boris Johnson, said sources with direct knowledge of the talks.

Johnson's deputy, Kit Malthouse, discussed a range of investment and market-related issues including a possible Alibaba listing, said one source with first-hand knowledge of the talks.

The source said Alibaba executives expressed "huge interest" in listing the firm on the London Stock Exchange (LSE), while Malthouse said he was open to a secondary listing in London.

Alibaba officials declined to comment on the meeting when contacted by the Post.

"As a matter of policy, we do not discuss the content of meetings with government leaders," a spokeswoman said.

We do not discuss … meetings with government leaders

A source close to Alibaba confirmed that the company had been in contact with the LSE, but had no further information about the status of any talks.

The disclosures suggest that Hangzhou-based Alibaba - founded by teacher-turned-entrepreneur Jack Ma Yun - is keeping its listing options open after failing to convince Hong Kong regulators of the merits of its partnership structure. It would allow a coterie of top executives to nominate a majority of the members of the board of directors.

Hong Kong regulators say that effectively breaches the city's "one shareholder, one vote" listing rules.

Alibaba decided not to pursue a listing in Hong Kong as a result and the firm's chief executive made a rare public statement earlier this month to say so.

While company officials insist no decision has yet been taken on where the firm will eventually list, Alibaba did announce late last week that the New York Stock Exchange and its smaller hometown rival, Nasdaq, had accepted the partnership structure.

Investment bankers said that they believe listing plans are still far from firm and that anything could happen. "Before you submit your listing application, I will say nothing is legally binding. New York, or London, or even Singapore can easily say 'yes I welcome you', but at the end of the day they will sit down and look at your documents line for line and word for word and this is not going to be an easy game," said one banking source who has closely monitored the Alibaba saga for months.

If Alibaba eventually chooses to list in New York, it could be good news for Wall Street banks Goldman Sachs and Morgan Stanley, which market sources say have been advising it, along with Credit Suisse.

A decision to list in New York could see the firm opt for American banks to play the leading roles in helping soothe any investor nerves on Wall Street, where Alibaba founder and chairman Ma has a mixed reputation.

Ma shocked Wall Street in May 2011 when investors realised he had transferred Alipay, a leading online payment system created and owned by Alibaba, to a private company held by Ma outside the group. Yahoo was outraged and some US fund managers even threatened to sue Ma in the US. Yahoo and Alibaba later resolved their differences.

Additional reporting by Jeanny Yu