Alibaba may Go Public as Early as Next Year, Raising $8Bln09-12 15:34 Caijing
China's largest e-commerce firms, Alibaba Group, expects to bring forward its plan to tap the capital market as early as next year after it is nearing to finish the buyback of stocks controlled by Yahoo, reports the Hong Kong Ming Pao.
The newspaper quoted sources as saying that Alibaba is expected to announce the completion of a more than $8 billion round of financing that will value it at as much as 43 billion in equity next week. Alibaba plans to use the bulk of that new money to buy back a 20 percent stake in itself from Yahoo for 7.1 billion U.S. dollars.
Yahoo owns 40 percent of Alibaba. Under the agreement hashed out in May, Yahoo will sell back another 10 percent of Alibaba when the Chinese company goes public and divest itself of the rest at later date.
The company will launch its initial public offering earlier than expected if the market improves, said the newspaper, adding that an investment-banking group began to take steps to prepare for the listing. Alibaba had initially agreed with Yahoo that it would go public by 2015 at the latest.
The company's 8-billion financing round reportedly includes a $1.5 billion sale of convertible preferred shares, the sale of $2.5 billion in common shares, and the sale of $4billion in bonds.
Analysts say the sale of convertible shares aims to introduce strategic investors for the planned IPO. Although numerous investors have expressed interests in having a stake in Aliababa, the company has refrained from overpricing itself, according to Ming Pao. The price is equivalent to 15 to 18 times forecast 2013 earnings, it said.
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