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.