Shareholders greenlight Alibaba.com's privatization bid

Approval means Alibaba Group will buy back 27 percent stake it currently doesn't own to delist company, freeing it from pressure of restructuring and future public listing of entire company.
Written by Kevin Kwang, Contributor

Alibaba.com is moving toward delisting itself from the Hong Kong Stock Exchange, after minority shareholders agreed to the company's proposal to buy their stake. This frees the Chinese e-commerce giant from pressures during its restructuring phase, while also preparing Alibaba Group for public listing, reports MarketWatch.

The online financial news agency stated on Friday Alibaba Group will pay HK$13.5 (US$1.74) per share for the 27 percent stake in Alibaba.com it does not own currently. The company suspended its shares from trading on Friday, with shares closing at HK$13.42 (US$1.73) on Thursday, it added.

MarketWatch cited Alibaba chief executive Jack Ma who said the privatization was primarily geared at taking pressures off the e-commerce portal during its restructuring period. It also noted that the move could be seen as a means to consolidate control over Alibaba Group, with the aim of eventually taking all of the organization's operations in a single public listing.

Besides Alibaba.com, the Chinese company also owns auction site Taobao and business-to-consumer (B2C) platform Taobao Mall.

The report also pointed out Alibaba's agreement with Yahoo to wind down its partnership incentivizes the former to list before December 2015, as that would allow it to buy back another 10 percent of the U.S. Web company's stake in the Chinese company. Both agreed on Monday to Alibaba buying back 20 percent of its shares from Yahoo for US$7.1 billion.

It was subsequently reported the Chinese company held talks with its shareholders such as Singapore's Temasek Holdings to raise US$2.3 billion to fund the repurchase of its shares.

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