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

Yahoo-Alibaba Talks Falter
Alibaba.com Ltd. bags are distributed at the 2012 International Consumer Electronics Show (CES) in Las Vegas. Photographer: Andrew Harrer/Bloomberg

Feb. 17 (Bloomberg) -- Alibaba Group Holding Ltd. plans to take private its Alibaba.com Ltd. 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. 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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