Yahoo, Softbank back Alibaba in HK IPO battle
HONG KONG – CHINESE e-commerce giant Alibaba’s biggest shareholders, Yahoo and Japan’s Softbank Corp, on Friday backed the company’s unusual management structure that Hong Kong’s stock exchange was unwilling to accommodate, forcing it to look to the US for a potentially mammoth IPO.
The show of support came a day after a senior Alibaba Group executive sharply criticised the southern Chinese city’s stock exchange for being too inflexible in discussions about a share sale that had been expected to raise up to US$15 billion.
The company broke off talks for a Hong Kong initial public offering because the stock market wasn’t willing to make an exception to its listing rules. Instead, it’s looking to New York for an initial public offering that analysts estimate could value the company at more than US$100 billion.
That would dwarf the tech world’s other hotly anticipated share offering by Twitter, which is estimated to have a market value of US$10 billion.
In a column posted late Thursday on Alibaba’s blog, Vice-Chairman Joe Tsai said, “Hong Kong must consider what is needed in order to adapt to future trends and changes.”
Tsai said the company had ended its discussions for a potential listing. It’s the first public acknowledgement that it has dropped its plans for an IPO in Hong Kong, which Tsai said was the company’s “first choice” because most of its business is in China.
Alibaba’s two biggest shareholders, Yahoo and Japan’s Softbank, issued statements backing Alibaba.