China e-commerce firm Alibaba in privatization bid

Feb 21, 2012 By KELVIN CHAN , AP Business Writer

(AP) -- Alibaba.com's parent company wants to take the Chinese e-commerce company private for $2.5 billion, the firms said Tuesday, part of a shift in business strategy that also includes plans to buy back a stake from Yahoo Inc.

Alibaba Group Holding Ltd. said it is offering to buy the Hong Kong-listed shares of .com that it doesn't already own for 13.50 Hong Kong dollars a share, at a cost of up to HK$19.6 billion ($2.5 billion). The offer is 46 percent higher than the stock's last price of HK$9.25 before it was suspended from trading on Feb. 8. The shares are to resume trading on Wednesday.

After years of rapid growth, Alibaba.com expects to add paying customers at a slower rate so it is now focusing more on improving the experience of existing manufacturers, wholesalers and trading companies that use the site. That could hurt financial results, the companies 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," founder and Chairman Jack Ma said.

Alibaba said the "depressed" is also having an "adverse impact" on business, its reputation with customers and employee morale. Taking the company private would eliminate that problem.

Yahoo owns about 40 percent of Alibaba Group, which in turn owns about 73 percent of Alibaba.com.

Alibaba Group has been negotiating with Yahoo to buy back its but those talks have stalled over the terms. The company noted that it is in talks with Yahoo to "restructure" its holdings in Alibaba Group but said the privatization offer isn't conditional on that deal's completion.

Explore further: Bose sues Beats over headphone patents

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Alibaba, Softbank discussing Yahoo! bid: report

Nov 09, 2011

China's Alibaba Group and Japan's Softbank are in talks with private equity firms about making an unsolicited bid for Yahoo!, according to the Bloomberg financial news agency.

China's Alibaba raising $3bn for Yahoo! stake: report

Feb 09, 2012

Chinese online commerce giant Alibaba plans to borrow $3 billion to buy back the stake Yahoo! owns in the company, a report said Thursday, as the struggling US Internet firm overhauls its Asia holdings.

China grants Alibaba payment system license

May 26, 2011

(AP) -- An online payment system founded by Chinese e-commerce giant Alibaba Group was granted a government license, the company said Thursday, following an ownership change that rattled investors in partner Yahoo Inc.

Yahoo! shares sink on Alibaba tensions

May 13, 2011

Yahoo! shares extended their slide on Friday amid tensions with Alibaba Group, the Chinese e-commerce giant in which the California Internet company holds a large stake.

Alibaba to reach out to Yahoo CEO on stalled deal

Feb 15, 2012

(AP) -- Alibaba Group and Japan's Softbank will go directly to Yahoo's chief executive, bypassing negotiators from the U.S. Internet company, after talks over the sale of Yahoo's Asian holdings broke down, a person familiar ...

Recommended for you

Report: China to declare Qualcomm a monopoly

15 hours ago

(AP)—Chinese regulators have concluded Qualcomm Inc., one of the biggest makers of chips used in mobile devices, has a monopoly, a government newspaper reported Friday.

User comments : 0