Alibaba picks U.S. for IPO in blow to Hong Kong exchange

HONG KONG Sun Mar 16, 2014 3:35pm IST

An employee walks past a logo of Alibaba Group at its headquarters on the outskirts of Hangzhou, Zhejiang province, in this May 17, 2010 file photo. REUTERS/Stringer

An employee walks past a logo of Alibaba Group at its headquarters on the outskirts of Hangzhou, Zhejiang province, in this May 17, 2010 file photo.

Credit: Reuters/Stringer

Related Topics

Stocks

   

HONG KONG (Reuters) - Alibaba Group Holding Ltd IPO-ALIB.N said on Sunday it has decided to begin the process for an initial public offering (IPO) in the United States, ending months of speculation about where the Chinese e-commerce giant would go public.

Alibaba's planned U.S. listing is the most anticipated IPO since Facebook Inc (FB.O) raised $16 billion in 2012. Alibaba's decision to go to the United States is a blow to the Hong Kong stock exchange, which was initially the company's preferred venue for the IPO.

Analysts estimate the Hangzhou, China-based company has a value of at least $140 billion, and the IPO proceeds could exceed $15 billion, Reuters previously reported.

Alibaba also said in a statement on its corporate news Web site it might consider extending its public status to Chinese capital markets in future in order for local investors to be able to share in its growth.

Alibaba, which controls about 80 percent of the country's e-commerce, had been in discussions with the Hong Kong stock exchange and the Securities and Futures Commission since last year about a listing, but the island city's regulators blocked its proposal as it violated the "one-share-one-vote principle".

Alibaba's executive vice chairman Joe Tsai upped the rhetoric against Hong Kong when he told Reuters last week that the firm would not change its partnership structure in order to list on the Hong Kong stock exchange.

After an initial rebuff, Alibaba and the Hong Kong regulators were back at the negotiating table late last year, to find a solution to the problem. While the Hong Kong Exchanges and Clearing Ltd (0388.HK) has initiated a review of its listing rules to accommodate more flexible structures, any change to the existing rules would take months.

"We wish to thank those in Hong Kong who have supported Alibaba Group," Alibaba said in its statement.

"We respect the viewpoints and policies of Hong Kong and will continue to pay close attention to and support the process of innovation and development of Hong Kong."

Reuters reported on Saturday that Alibaba was seeking a U.S. listing in the third quarter of this year, with a filing expected as early as next month.

The listing also is closely watched by Alibaba's two largest shareholders - Yahoo Inc (YHOO.O), which owns 24 percent, and Japan's Softbank Corp (9984.T), which controls 37 percent. Alibaba's founders and some senior managers jointly own about 13 percent of the company.

Credit Suisse (CSGN.VX) and Morgan Stanley (MS.N) are among the two banks poised to win top underwriting mandates, while other banks are also expected to join the syndicate, people familiar with the matter added.

(Reporting by Elzio Barreto and Denny Thomas; Editing by Robert Birsel)

FILED UNDER:

Tech Talk

The logo of car-sharing service app Uber on a smartphone over a reserved lane for taxis in a street is seen in this photo illustration taken in Madrid on December 10, 2014. REUTERS/Sergio Perez

China's Baidu confirms investment in online taxi service Uber

Chinese Internet giant Baidu Inc confirmed on Wednesday it is buying a stake in fast-growing international car-hailing service Uber as the pair chase growth in one of the world's largest transportation markets.  Full Article 

REUTERS SHOWCASE

Pakistan Mourns

Pakistan Mourns

Parents bury children after school attack.  Full Article 

SpiceJet Grounded

SpiceJet Grounded

SpiceJet says fleet grounded on lack of fuel.  Full Article 

Business Sentiment

Business Sentiment

Asian business sentiment rebounds in Q4 with India most optimistic.  Full Article 

Abbott Speaks

Abbott Speaks

Tough new national security laws, bail rules failed hostages - Australian PM.  Full Article 

Curiosity on Mars

Curiosity on Mars

NASA rover finds organic molecules, methane gas on Mars.  Full Article 

Oddly Enough

Oddly Enough

Over 20,000 bras recalled in Japan due to injury fears.  Full Article 

Reuters India Mobile

Reuters India Mobile

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