Story from Bloomberg
Yahoo! Inc. is selling its stake in Alibaba.com Ltd., operator of China’s biggest trading Web site, for as much as HK$1.17 billion ($151 million), after the stock almost quadrupled in Hong Kong trading this year.UBS AG, the sole bookrunner, is placing 57.5 million shares, equivalent to a 1.1 percent stake, at an indicated price range of HK$19.80 to HK$20.30 each, according to terms of the sale obtained by Bloomberg News. That’s as much as 6.4 percent lower than Alibaba’s closing price in Hong Kong today.
The sale by Yahoo, owner of the second most popular U.S. Internet search engine, follows a placement by Alibaba Chairman Jack Ma last week that raised HK$273 million. Sunnyvale, California-based Yahoo is still the biggest shareholder of Alibaba Group Holding Ltd., the parent of Hong Kong-listed Alibaba.com.
“Yahoo regards its investment in Alibaba as long-term, so the decision is quite negative for the stock, especially as it came after Jack Ma’s sale,” said Steven Liu, an analyst who rates Alibaba.com “sell” at DBS Vickers Ltd. in Hong Kong. “The stock is quite expensive now after the rally this year.”
Alibaba rose 3.7 percent to HK$21.15 in Hong Kong today. The stock has almost quadrupled this year, compared with the 45 percent gain in the city’s benchmark Hang Seng Index. Yahoo fell 16 cents to $15.43 at 10:19 a.m. New York time in Nasdaq Stock Market trading.
In 2005, Yahoo paid $1 billion and swapped its Chinese operations for a 40 percent stake in closely held Alibaba Group. In 2007, the U.S. company was one of eight “cornerstone” investors which subscribed to the $1.7 billion initial public offering of Alibaba.com, the biggest first-time share sale by an Internet company since Google Inc.’s IPO in 2004.
Boost Liquidity
Alibaba.com said in June that Yahoo, Cisco Systems Inc.,American International Group Inc. and other cornerstone investors would be allowed to sell their stakes immediately, five months before the expiry of a previously agreed lock-up agreement. The move was designed to boost liquidity of its shares, the Chinese company said at the time.
“We are pleased to learn of the Yahoo decision,” Alibaba spokesman John Spelich said in an e-mail today. The sale will help the company achieve broader ownership of its stock, he said.
Jeremy Seow, a Singapore-based spokesman at Yahoo, said he couldn’t immediately comment on the sale.
