Alibaba.com Ltd. (1688) shareholders should accept the parent company’s buyout offer, valued at HK$18.4 billion ($2.4 billion), given that the price is higher than past transactions, Glass Lewis & Co. said.
The HK$13.50 a share offered by Alibaba Group Holding Ltd. is fair, according to an e-mailed report today from Glass Lewis, a proxy advisory firm. The deal premium is more than a “selected set of transactions” tracked by the San Francisco- based firm, it said, without providing more specific details.
Alibaba Group, China’s biggest e-commerce company, plans to take Alibaba.com private as a change in the unit’s business strategy may hurt revenue, the parent said in February. First- quarter profit at the Hong Kong-listed unit fell 25 percent as fewer website subscriptions were sold to Chinese exporters.
“Based on the reasonable rationale and the favorable financial terms, we believe that the proposed scheme is in the best interests of the minority shareholders,” Glass Lewis said.
Alibaba has nothing to add at present, John Spelich, a company spokesman in Hong Kong, said in an e-mail, when asked to comment on the recommendation by Glass Lewis.
Stockholders of Alibaba.com will vote on the buyout proposal at a May 25 meeting in Hong Kong.
The parent is offering as much as HK$19.6 billion, including additional costs such as buying out shares converted by option holders, it said Feb. 21. The per-share offer price is 46 percent more than Alibaba.com’s closing price before the stock was suspended Feb. 9 pending the offer announcement.
Alibaba Group, part-owned by Yahoo! Inc. (YHOO) and Softbank Corp. (9984), owns e-commerce units including Alibaba.com, a website focused on business owners, and Taobao, China’s biggest online shopping site.
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