Alibaba Group may postpone its potential HK$100 billion listing plan to 2015 if the mainland's top e-commerce firm cannot get a deal done in Hong Kong this year.
A delay would be linked to the terms of a deal struck last year with Yahoo, giving Alibaba the right to buy back half the 24 per cent stake the United States internet company holds in the mainland firm by the end of 2015, investment bankers told the South China Morning Post.
Failure to list before December 31, 2015, would force Alibaba back to the negotiating table to agree new terms, bankers said.
Founder and chairman Jack Ma Yun and his long-time friend and executive vice-chairman, Joe Tsai, have persuaded the company's top management that an initial public offering should not be rushed, despite a determined push in recent weeks to set the listing wheels in motion, sources familiar with the discussions told the Post.
"It's not about money. In fact, Alibaba isn't short of cash. Jack Ma cares more about retaining control of the company than how much money he can raise from the IPO," a banker with knowledge of the situation said.
Tsai, who is considered Ma's closest adviser, told several bankers recently that a listing this year was not a must for Alibaba and that the company had other priorities including making overseas acquisitions, the sources said.
Alibaba had missed its window to sell shares in New York this year and might have only a matter of weeks left before the same happened in Hong Kong, the Post reported on Wednesday.
Delaying to next year could put a big dent into the potential HK$100 billion analysts estimate Alibaba could raise if the deal comes to market this year, given the pent-up demand among fund managers after a lack of major new offerings this year.
If Alibaba joins the swelling pipeline of deals for early next year, it risks coming to market as an expected increase in global interest rates fuelled by an anticipated scaling back of the US Federal Reserve's quantitative easing programme jolts stock market valuations, money managers say.
A spokesman for Alibaba yesterday reiterated that the company had no specific timetable for an initial public offering, had not appointed underwriters, and had not selected a listing venue.
Alibaba has run into regulatory trouble in Hong Kong over Ma's determination to keep management control of the firm he founded in Hangzhou in 1999, despite having only a 7.4 per cent stake. The top management team combined own about 10 per cent of the company.
Beside's Yahoo's 24 per cent holding, Japan's SoftBank has a 36.7 per cent stake.
Talks with Hong Kong regulators have been stalled by a stand-off over the firm's desire to retain a partnership structure that the authorities fear could give too much voting power to company executives at the expense of ordinary shareholders.
Both the New York Stock Exchange and its smaller rival Nasdaq are lobbying Alibaba to list in the US where a dual-class share structure is allowed and in particular popular among technology firms such as Google and Facebook.