Sina Technology News, February 16th morning message, according to Hong Kong's "Economic Daily" report, an informed source revealed that Alibaba Group plans to propose the privatization of its B2B listed company at the IPO price of HKD 13.5 per share in 2007, which represents a 46% premium over the price before suspension, with an estimated capital involvement of over HKD 18 billion.
Alibaba Group spokesperson John Spelich stated "no comment." Alibaba was suspended last Thursday, aiming to clarify speculations regarding transactions with major shareholders, which might or might not affect Alibaba. Alibaba was reported at HKD 9.25 before suspension.
An insider close to the matter disclosed that the parent company plans to propose a full acquisition to all shareholders of Alibaba and privatize it, thereby delisting from the Hong Kong Stock Exchange. The initial purchase price is set at HKD 13.5 per share, which is the IPO price when it went public in November 2007. This represents a significant 46% premium over the price before suspension, equivalent to a historical P/E ratio of 46.55 times, and also an 8.7 times premium over the net asset value per share as of June last year, which was HKD 1.39.
The privatization involves over HKD 18 billion. Currently, Alibaba Group holds 73.12% or 3.652 billion shares. If it acquires the remaining 26.88% shares at HKD 13.5 per share, the total cost would be HKD 18.231 billion. It's worth noting that as of June last year, Alibaba held HKD 10.111 billion in cash, or HKD 2.02 per share.
The privatization price of Alibaba is still in the draft stage and remains uncertain. However, the source indicated that using the IPO price as the privatization price considers whether shareholders who subscribed to new shares then can have the chance to exit even-steven.
Alibaba went public on November 6, 2007, during the peak period when the Hong Kong stock market reached 30,000 points. On its first trading day, the stock surged by 1.9 times. But since going public, Alibaba has cumulatively fallen by 31.5%, while the Hang Seng Index fell by 26.2% during the same period. "Considering the market trend, the opportunity cost for shareholders holding from IPO till now is actually not high."
Negotiations with Yahoo Stalled
Previously, there were reports that after privatizing Alibaba, the parent company planned to exchange cash plus assets for Yahoo's holdings. According to foreign media reports, negotiations between Yahoo and Alibaba over the sale of Alibaba's group shares and Japanese operations are deadlocked. All parties hope the deal will be tax-efficient, but other methods are not ruled out.
Additionally, one of Yahoo's shareholders, hedge fund Third Point LLC, plans to nominate their own people to join the board, adding more uncertainties to Yahoo's asset sale. (All)
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