Alibaba postpones US roadshow ahead of IPO

Hangzhou-based e-commerce firm in talks with securities, exchange commission

PUBLISHED : Sunday, 31 August, 2014, 6:02am
UPDATED : Sunday, 31 August, 2014, 1:44pm

Alibaba Group is postponing the start of investor meetings for its initial public offering by about a week to answer questions posed by the US Securities and Exchange Commission, according to a person with knowledge of the matter.

The e-commerce giant, which was weighing a plan to market its IPO early this week, now expects the meetings to begin in the week of September 8, with tentative pricing on September 18 and trading to start the following day, said the person, who asked not to be identified.

Alibaba, based in Hangzhou , Zhejiang province, has been in discussions with the SEC as it seeks regulatory approval of its prospectus. The company had held off rushing the deal after originally targeting an early-August trading debut.

"There shouldn't be any obstacles for proceeding with the IPO," said Li Muzhi, a Hong Kong-based analyst at Arete Research Service. "This just gives them a bit more time."

Florence Shih, a spokeswoman for Alibaba in Hong Kong, declined to comment.

The investor meetings, known as a roadshow, will give Alibaba, founded by billionaire Jack Ma Yun, the opportunity to answer questions from the world's biggest fund managers and build demand for its shares.

With Alibaba and selling shareholders expected to raise as much as US$20 billion, the IPO has the potential to be the largest offering in US history.

At US$20 billion, Alibaba's sale would edge past Visa's US$19.65 billion IPO in 2008 as the biggest in US history, data compiled by Bloomberg show.

The e-commerce operator, which plans to sell shares on the New York Stock Exchange, may set its IPO value at US$154 billion, or 22 per cent below analyst valuations, in a move that could avoid repeating Facebook's listing flop, according to the average estimate in a Bloomberg survey of five analysts last month.

The poll respondents give Alibaba an average post-listing valuation of US$198 billion.

Hong Kong missed out on the mega IPO last year, forcing it to look for a US listing. In October, Hong Kong Exchanges and Clearing refused to grant Alibaba an exemption allowing it to list with a structure that would give its founder and certain executives the right to nominate the majority of board members even though they would hold only minority stakes. The US allows such shareholding structures.