Alibaba Could Buy Up to $150 Million in Best's Downsized IPO

Updated on
  • Chinese package delivery firm reduces deal size by nearly half
  • Best seeks $495 million as price range, number of shares cut

Employees work at Alibaba's headquarters in Hangzhou, Zhejiang Province, China.

Photographer: Nelson Ching/Bloomberg

Alibaba Group Holding Ltd. is interested in buying as much as $150 million in Best Inc.’s initial public offering, after the Chinese logistics provider cut the size of the deal nearly in half.

Best is seeking as much as $495 million from the IPO after it reduced the price range and existing investors decided not to sell stock, according to a filing Tuesday with the U.S. Securities and Exchange Commission. The Hangzhou-based company is now offering 45 million American depository shares at $10 to $11 apiece.

Best isn’t obligated to sell any shares to Alibaba, the filing says.

The express-delivery firm is planning a debut after more than a monthlong drought in the U.S. IPO market. Zai Lab Ltd., the Chinese drug developer seeking to raise as much as $106 million selling shares in the U.S., is also aiming to price its offering this week, according to an earlier filing.

Best and its existing investors were initially seeking to raise as much as $932 million from the IPO, according to an earlier filing. The company was offering 53.56 million ADSs at $13 to $15 apiece, while existing investors were selling 8.54 million ADSs. 

Representatives for Alibaba and Best declined to comment.

Alibaba, backed by billionaire Jack Ma, was already Best’s biggest shareholder before the IPO with a 23.4 percent stake, according to a Sept. 6 regulatory filing. Cainiao Smart Logistics Network Ltd., a logistics affiliate of Alibaba, owns 5.6 percent. Alibaba online-shopping platforms like Taobao and Tmall accounted for about 69 percent of Best’s express deliveries in the first half of the year, the filing shows.

ZTO Express Inc., another Chinese package-delivery firm that relies on Alibaba for most of its business, has fallen 24 percent since it began trading last year.

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