Alibaba.com shares up after parent's Alipay deal with SoftBank, Yahoo

HONG KONG/SHANGHAI Mon Aug 1, 2011 8:09am IST

Two men chat beside a logo of Alibaba (China) Technology Co. Ltd at its headquarters on the outskirts of Hangzhou, Zhejiang province May 17, 2010. REUTERS/Steven Shi/Files

Two men chat beside a logo of Alibaba (China) Technology Co. Ltd at its headquarters on the outskirts of Hangzhou, Zhejiang province May 17, 2010.

Credit: Reuters/Steven Shi/Files

Related Topics

HONG KONG/SHANGHAI (Reuters) - Shares of Alibaba.com Ltd rose to a two-week high on Monday after its parent, Chinese e-commerce firm Alibaba Group, forged a complex deal with SoftBank Corp and Yahoo Inc over mobile payments unit Alipay.

Alibaba.com, the only listed unit of Alibaba Group, rose as much as 7.37 percent to a two-week high of HK$11.66, outperforming the Hang Seng Index's 1.39 percent gain.

"I don't think the rise has anything to do with the listed company, it has more to do with the parent company managing to settle the Alipay issue with its two major shareholders," said Elinor Leung, a Hong Kong-based CLSA analyst. "Net-net it is good for the entire Alibaba Group development so you don't have the (risk) overhang anymore."

Alibaba, Yahoo and Softbank on Friday announced a deal that would see Alibaba receive up to $6 billion in the event that Alipay is listed or sold.

The deal capped months of intense negotiations sparked by the transfer of Alipay to a company wholly owned by Alibaba Group founder Jack Ma.

Alibaba Group said the transfer was necessary for Alipay to comply with domestic regulations in order acquire a license to continue operating as an e-payment service. Yahoo said in May that it was not aware of the transfer, while Alibaba countered that it had kept Yahoo and Softbank board members in the loop.

Alibaba Group, China's largest e-commerce company, is 40 percent owned by Yahoo and 30 percent owned by Softbank Corp.

(Editing by Chris Lewis)

FILED UNDER:

Economic Pulse

REUTERS SHOWCASE

Gold Imports

Gold Imports

India eases gold import rule in surprise move.  Article 

Indians in Iraq

Indians in Iraq

India says no contact with 39 men held by Islamic State in Iraq.  Full Article 

Sahara Issue

Sahara Issue

Sahara looks to raise $650 million loan to fund bail.  Full Article 

Test Match Postponed

Test Match Postponed

First test against India postponed after death of Hughes  Full Article | Related Story 

Bhopal Tragedy

Bhopal Tragedy

Bhopal's toxic legacy lives on, 30 years after industrial disaster.  Full Article 

Banking Sector

Banking Sector

After record deal, more India bank takeovers on cards  Full Article 

Islamic Fund

Islamic Fund

India gets new Islamic equity fund but debt market still off-limits  Full Article 

Nigeria Violence

Nigeria Violence

Bombs, gunfire kill 81 at crowded mosque in Nigeria's Kano  Full Article 

Movie Review

Movie Review

D’Silva's “Ungli” just skims the surface  Full Article | Related Story 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage