Alibaba Group Cleared to Take Unit Private After Hong Kong Vote
By Mark Lee - 2012-05-25T02:02:03Z
Alibaba Group Holding Ltd., China’s biggest e-commerce company, was cleared to take its Hong Kong- listed unit private after minority shareholders at the subsidiary approved a $2.5 billion buyout offer from the parent.
More than 95 percent of votes cast by Alibaba.com Ltd. (1688) shareholders at a ballot in Hong Kong today supported the buyout offer, Company Secretary Elsa Wong said. That was more than the 75 percent required to approve the transaction.
Alibaba Group said in February it will offer as much as HK$19.6 billion ($2.5 billion) for shares it didn’t own in Alibaba.com, after profit at the unit declined. The closely held Chinese parent company this week agreed to repurchase $7.1 billion of stock from U.S. shareholder Yahoo! Inc. (YHOO) in a deal that billionaire Chairman Jack Ma said may facilitate an initial public offering in the future.
“The privatization of Alibaba.com will simplify the corporate structure at the Alibaba parent, and will be helpful for a future IPO of the whole group,” Qiu Lin, an Internet analyst at Guosen Securities Co. in Hong Kong, said before the vote. “Alibaba.com’s growth has slowed, and it may be easier to fix the business after it’s privatized.”
Earlier today, Alibaba.com shares were suspended from trading.
Alibaba Group controls 73 percent of the shares of Alibaba.com, its e-commerce division that is focused on business owners. The Hangzhou, China-based parent also operates online shopping sites including Taobao and Tmall for consumers.
Alibaba.com shares fell 42 percent last year, as the company said it was changing its focus from adding customers to improving service for users. First-quarter profit fell 25 percent, as fewer website subscriptions were sold to exporters, the unit reported last month.
To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
Please enable JavaScript to view the comments powered by Disqus.
