Mainland e-commerce giant Alibaba Group moved a step closer to taking its subsidiary Alibaba.com private after its offer was endorsed by the Hong Kong-listed unit's independent board committee and financial adviser. Alibaba, which is controlled by mainland entrepreneur Jack Ma Yun, has offered to buy out the minority shareholders of Alibaba.com for HK$18.39 billion, according to the 'scheme document' jointly filed by the two firms yesterday with the Hong Kong stock exchange. 'We consider the terms of the privatisation proposal to be fair and reasonable,' said Somerley, the independent financial adviser. The deal offers minority shareholders HK$13.50 per share, a premium of 60.4 per cent over the 60-day average closing price of the shares and a premium of 55.3 per cent over the 10-day average closing price before the privatisation plan was announced on February 21. 'The independent board committee, having considered the terms of the privatisation proposal and having taken into account the opinion of Somerley, recommends the independent shareholders vote in favour of the resolution to approve the proposal,' said Walter Kwauk Teh-ming and Niu Gensheng, the two independent non-executive directors tasked to evaluate the privatisation deal. Alibaba said it intended to finance the privatisation with new financing and cash on hand. The company and other parties in the proposal own 73.45 per cent of Alibaba.com. The parent firm's financial advisers are Rothschild, Credit Suisse and Deutsche Bank. HSBC is advising the subsidiary. The minority shareholders will vote on the offer on May 25. Meanwhile, Alibaba.com expects revenue growth to be challenging in the near term because of efforts to upgrade its operations. The world's largest business-to-business e-commerce company, with 79.8 million users worldwide at the end of last month, yesterday reported a 25 per cent drop in first-quarter net profit to 339.2 million yuan (HK$417.4 million) from 452.5 million yuan a year earlier. That was its lowest quarterly earnings since posting 330 million yuan in the first quarter of 2010. 'As expected, our continuing investment in upgrading our business model and our higher membership standards for suppliers have negatively impacted our financial performance,' chief executive Jonathan Lu Zhaoxi said. Revenue rose to 1.59 billion yuan from 1.53 billion yuan. The number of paying members on its international and domestic trading websites fell 9.4 per cent to 753,955 from 832,469, as it focused on improving the trustworthiness of online suppliers. In February, Ma said the privatisation would allow shareholders 'to realise their investment now at an attractive cash premium, rather than waiting indefinitely during this period of transition'.