DST Global and Temasek Holdings Pte are among investors that agreed to buy shares of Alibaba Group Holding Ltd. in a transaction valuing China’s largest e-commerce company at $32 billion, said two people familiar with the deal.
Silver Lake and Alibaba Chairman Jack Ma’s Yunfeng Capital are also part of the group buying as much as $1.6 billion stock from Alibaba employees, said the people, who asked not to be named because terms of the agreement were private.
The investment values closely held Alibaba, whose Taobao online shopping site has more than 370 million users, behind only Baidu Inc. (BIDU) and Tencent Holdings Ltd. (700) among Internet companies in China. Alibaba chairman Ma is bringing in new investors DST Global and Silver Lake after clashing with existing shareholders Yahoo! Inc. (YHOO) and Softbank Corp. (9984) over the spinoff of an online payment business this year.
Temasek, Singapore’s state-owned investment company, is an existing shareholder at Alibaba, DST Global and Silver Lake said in a joint-statement yesterday announcing their investment that didn’t disclose financial terms. John Spelich, a Hong Kong-based spokesman at Alibaba, declined to comment today on the financial terms of the investment, and wouldn’t say when Temasek initially became a shareholder.
Baidu, China’s biggest Internet search company, was valued at $43 billion based on its $123.18 closing price in New York yesterday. Tencent rose 1.5 percent to HK$159 at the 4 p.m. close in Hong Kong trading, valuing the biggest Chinese online games company at HK$292.1 billion ($37 billion).
Alibaba is taking a cue from U.S. Internet companies including Facebook Inc. (FB) and Twitter Inc. (TWTR), which have used private investment rounds to let employees cash out shares. By doing so, the companies relieve one of the major pressures for holding an initial public offering.
DST, the technology fund managed by Russian billionaire Yuri Milner and an investor in Facebook, last month led an $800 million financing round in Twitter.
Silver Lake, the private equity firm that sold its holdings in Skype Technologies SA this year to Microsoft Corp. (MSFT), is also considering a bid for Yahoo., which holds a 43 percent stake in Alibaba, two people familiar with the matter said last week.
Alibaba, based in Hangzhou, east China, adds two of Silicon Valley’s most prominent technology investors as it expands beyond e-commerce to build a search engine and a mobile operating system.
Alibaba’s Ma clashed with former Yahoo CEO Carol Bartz over issues including the sale of Alibaba’s Alipay online payment network. Bartz was fired this month, clearing the way for Yahoo to consider selling its stake in Alibaba, a person familiar with the matter said this month.