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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

TECH DEAL

A view of Microsoft and Nokia signs in Peltola, Oulu July 16, 2014. Microsoft Corp said on Thursday it would cut up to 18,000 jobs, or about 14 percent of its workforce, as it halves the size of its recent Nokia acquisition and trims down other operations. REUTERS/Markku Ruottinen/Lehtikuva

Opera's Mini browser to be installed on Microsoft phones

Norwegian software maker Opera signed a deal to take over the browser building unit of Microsoft's Nokia mobile phone unit and reported second-quarter earnings above expectations, sending it shares sharply higher.  Full Article 

Reuters Showcase

Silicon Valley Women

Silicon Valley Women

Despite lip service, Silicon Valley venture capital still a man’s world   Full Article 

Cyber Attacks

Cyber Attacks

U.S. government's nuclear watchdog victim of cyber attacks - report  Full Article 

Net Neutrality

Net Neutrality

Online video stars mobilize for U.S. net neutrality  Full Article 

'Heartbleed' Bug

'Heartbleed' Bug

U.S. hospital breach biggest yet to exploit Heartbleed bug - expert  Full Article 

Deal Talk

Deal Talk

Infineon agrees to buy Int'l Rectifier for $3 bln in cash  Full Article 

Reuters India Mobile

Reuters India Mobile

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