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Alibaba Could Raise HK$100 Billion in Hong Kong IPO: E&Y

Alibaba Group Holding Ltd., China’s biggest e-commerce company, could raise HK$100 billion ($12.9 billion) if it proceeds with an initial public offering in Hong Kong this year, according to an estimate by Ernst & Young LLP.

Companies may raise HK$100 billion through initial share sales in the city this year and the amount would double if a “mega-size TMT IPO” was completed, the accounting firm said in a report distributed in Hong Kong yesterday. Ernst & Young was referring to Alibaba Group’s possible offering in the estimate, Jacky Lai, a Hong Kong-based assurance partner at the firm said. TMT refers to telecommunications, media and technology.

An IPO worth HK$100 billion would be Asia’s biggest since October 2010, when AIA Group Ltd. (1299) raised HK$159 billion, according to data compiled by Bloomberg. Companies have raised about HK$40 billion in IPOs in Hong Kong this year, up from HK$16 billion in the same period last year, the data show.

Alibaba Group hasn’t made any decision on the timing or venue of a possible IPO, said John Spelich, a Hong Kong-based spokesman for the company.

The Hangzhou-based company’s billionaire founder, Jack Ma, said last year that it may go public within five years. Proceeds from the sale would be used along with additional cash to buy back stock held by Yahoo! Inc. (YHOO), a person with knowledge of the matter said last month.

Alibaba is worth as much as $100 billion, Eric Qiu, an analyst at Guosen Securities Co. recently said. Ernst & Young did not specify how much of a stake it expects Alibaba to sell, or what the total valuation of the company would be in a HK$100 billion sale.

To contact the reporter on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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