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Alibaba Group Said to Plan Privatizing Alibaba.com Close to IPO Price

Photographer: Andrew Harrer/Bloomberg

Alibaba.com Ltd. bags are distributed at the 2012 International Consumer Electronics Show (CES) in Las Vegas. Close

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Photographer: Andrew Harrer/Bloomberg

Alibaba.com Ltd. bags are distributed at the 2012 International Consumer Electronics Show (CES) in Las Vegas.

Alibaba Group Holding Ltd. (ALIBABZ) plans to take private its Alibaba.com Ltd. (1688) unit in a deal that may value the Hong Kong-listed company at as much as $8.7 billion, according to two people with knowledge of the matter.

China’s biggest e-commerce company, which owns more than 72 percent of Alibaba.com, may offer a price close to the HK$13.50 a share at which the stock was sold in a 2007 initial public offering, one person said, asking not to be identified because the information is private. That’s 55 percent above Alibaba.com’ 20-day moving average through Feb. 8, after which its shares were suspended.

At the IPO price, buying the 28 percent it doesn’t already own will cost Alibaba Group about $2.4 billion, according to data compiled by Bloomberg. John Spelich, a Hong Kong-based spokesman for Alibaba Group, declined to comment.

Hong Kong Economic Times reported yesterday that Alibaba Group may offer HK$13.50 a share, citing people it didn’t identify.

The privatization is being planned with Alibaba.com’s shares down 44 percent in the 12 months before trading was halted. The IPO was priced a day before the Hang Seng Index climbed to a record on Oct. 30, 2007. Since then, the index has dropped 32 percent, according to data compiled by Bloomberg.

Alibaba Group’s talks to buy back a stake in itself that is currently held by Yahoo! Inc. (YHOO) have reached an impasse, a person familiar with the matter said this week. Yahoo is the biggest shareholder in closely held Alibaba Group with a stake of about 40 percent.

Alibaba Group plans to sign loan documents for a $3 billion facility with six banks as early as next week, a person familiar with the matter said today. The funds are being borrowed for a potential deal involving Yahoo, which could also include buying back Alibaba.com, the person said.

To contact the reporters on this story: Cathy Chan in Hong Kong at kchan14@bloomberg.net; Katrina Nicholas in Singapore at knicholas2@bloomberg.net

To contact the editor responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net

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