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:

Reuters Showcase

India Cricket Chief

India Cricket Chief

Former ICC boss Dalmiya returns as BCCI chief.  Full Article 

S&P on Budget

S&P on Budget

Budget shows commitment to keep fiscal deficit low - S&P.  Full Article 

Richie Rich

Richie Rich

Bill Gates tops Forbes rich list, Michael Jordan joins.  Full Article 

Mega Buy

Mega Buy

HP to buy Wi-Fi gear maker Aruba Networks for $2.7 bln.  Full Article 

Blogger's Murder

Blogger's Murder

Bangladesh says arrests main suspect in U.S. blogger Avijit Roy's killing.  Full Article 

Alleged Threats

Alleged Threats

Twitter, law enforcement investigate alleged Islamic State threats.  Full Article 

New Tour

New Tour

Pop icon Madonna announces dates for 'Rebel Heart' tour.  Full Article 

Lathmar Holi

In Pics: Lathmar Holi

Images of "Lathmar Holi" at Nandgaon in Uttar Pradesh.  Full Coverage 

Reuters India Mobile

Reuters India Mobile

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