SoftBank Plans to Keep Alibaba Stake as Public Listing Looms

SoftBank Corp. (9984) said it plans to keep its stake in Alibaba Group Holding Ltd. if China’s largest e-commerce company proceeds with what may be the biggest initial public offering since Facebook Inc.

The Tokyo-based wireless carrier holds about 37 percent of Alibaba, Yoshimitsu Goto, SoftBank’s general manager for finance, said in an interview. SoftBank hasn’t told Alibaba when to hold an IPO or where to hold it, Goto said.

“Alibaba is among the most important companies in our group, so our plan is to hold the stake for a long period of time,” Goto said. “What’s important for us as a shareholder in Alibaba is that the company continues increasing its enterprise value. An IPO is just a passing point to do that.”

Alibaba is considering an IPO that could value the Hangzhou-based company at $190 billion, analysts at Sanford Bernstein said last month as the e-commerce company more than doubled second-quarter net income to $707 million.

That potentially values SoftBank’s stake at $70 billion. SoftBank would have to discuss any decision about its Alibaba stake with the Chinese company’s management, Goto said.

He declined to comment on whether Alibaba earnings are reflected in SoftBank’s consolidated statements.

Alibaba IPO

Earnings at Alibaba aren’t yet consolidated to SoftBank’s financial results and profit contribution by the Chinese company will probably start next fiscal year to compensate for losses stemming from Sprint, Daisaku Masuno, an analyst at Nomura Holdings Inc., said last month.

Alibaba is moving toward an IPO in the U.S. after talks with Hong Kong’s exchange broke down following management’s proposal to keep control in a share sale, two people familiar with the matter said in September. Alibaba will go public in 2014, people with knowledge of the matter said last month.

SoftBank invested $20 million in Alibaba.com in 2000. The Japanese company, led by billionaire Masayoshi Son, now has Alibaba Chief Executive Officer Jack Ma on its board.

SoftBank which has been involved in at least 12 deals during the past year, paid $21.6 billion for Sprint Corp. in July before adding agreements for majority stakes in gamemaker Supercell Oy and U.S. mobile phone distributor Brightstar Corp. in October.

Son is Japan’s second-richest man with a net worth estimated at $14.4 billion, according to the Bloomberg Billionaires Index. His company owns stakes in more than 1,000 Internet businesses.

Ma, who helped found Alibaba in 1999, has a net worth of $3.6 billion, according to the Bloomberg Billionaires Index.

To contact the reporters on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net; Takashi Amano in Tokyo at tamano6@bloomberg.net; Yusuke Miyazawa in Tokyo at ymiyazawa3@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.