Alibaba's plans for US$15b listing in Hong Kong in doubt
George Chen and Ray Chan
Alibaba chairman Jack Ma’s manoeuvring to keep management control of the company he founded has derailed plans for a possible US$15 billion listing of the firm’s shares in Hong Kong this year.
It could even see the company opt for a New York listing instead, investment bankers have told the South China Morning Post.
Bankers that hope to do the deal told the Post that Ma, a teacher-turned-internet entrepreneur, has made repeated visits to Hong Kong in recent weeks. He was seeking advice on how to leverage his 7.4 per cent ownership stake in the firm he founded in 1999 into full management control after an initial public offering (IPO) of shares. Investment bankers who met Ma said they told him that New York was his best option, as listing rules there permit two classes of shares to be sold with differing voting rights. Hong Kong listing rules do not allow a dual-share structure.
“The numbers tell you everything – Jack Ma is not the biggest shareholder of the company, so naturally he will be concerned about what might happen after an IPO,” said one banker who met Ma and who declined to be identified on the grounds that the discussion was confidential.
Ma and his management team own a combined 10.4 per cent stake in Alibaba, the e-commerce website he founded in Hangzhou Information released by Japan’s Softbank and US internet giant Yahoo show they own 36.7 per cent and 24 per cent of Alibaba respectively.
Alibaba had been widely expected by investors to apply to list shares in Hong Kong in the fourth quarter of this year. But bankers say US stock exchanges – including both the New York Stock Exchange and rival Nasdaq – have been lobbying Ma to consider listing on their platforms to take advantage of rules that allow management of a company to retain control through shares that have more voting power than publicly traded shares.
An Alibaba spokesman said the company had not made any decision on when to list, where to list, or which or how many investment banks it would hire to take the company public.
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