Alibaba bids to take listed unit private for $2.5 billion

Tue Feb 21, 2012 9:33am EST
 
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By Melanie Lee

SHANGHAI (Reuters) - Jack Ma's Chinese e-commerce firm Alibaba Group has offered around $2.5 billion to take its Hong Kong-listed Alibaba.com unit private, stressing the move was unrelated to any possible deal to buy back shares owned by Yahoo Inc.

Alibaba Group is offering investors HK$13.50 ($1.74) in cash per share to take Alibaba.com private, the same price as at the company's IPO in 2007, the two firms said in a statement late on Tuesday.

The plan to take Alibaba.com private had nothing to do with separate complex talks with Yahoo on buying back part of the U.S. Internet pioneer's 40 percent stake in Alibaba, the Chinese firm said.

"Taking Alibaba.com private will allow our company to make long-term decisions that are in the best interest of our customers and that are also free from the pressures that come from having a publicly listed company," said Ma, who is chairman of Alibaba Group and board chair of Alibaba.com.

The offer is at a more than 60 percent premium to Alibaba.com's 60-day average closing price. The shares were suspended earlier this month at HK$9.25 - a 12-week closing high, but down 30 percent from last July. The stock will resume trading on Wednesday.

The offer is for the 27 percent of Alibaba.com that Alibaba doesn't already own. The shares are held by investors including Morgan Stanley, Vanguard Group and Capital International, according to Thomson Reuters data.

"If you're an existing shareholder, that's great news. It's a 46 percent increase from the last close," said Jin Yoon, a Hong Kong-based analyst with Nomura.

"The business was going through some significant changes and getting to that type of premium would have taken some significant amount of time. So, if you're a shareholder, you weren't going to see that kind of upside in the near term."   Continued...

 
An employee walks inside the headquarters office of Alibaba (China) Technology Co. Ltd on the outskirts of Hangzhou, Zhejiang province March 16, 2010. REUTERS/Lang Lang