Singapore's Temasek may back Alibaba for Yahoo stake

State-owned investment company Temasek Holdings in talks to fund Alibaba's move to reclaim the 40 percent stake Yahoo owns in the Chinese e-commerce business, according to report.
Written by Ellyne Phneah, Contributor

Alibaba Group Holdings has been in discussion with Singapore's Temasek Holdings regarding funds to buy back Yahoo's 40 percent stake in the Chinese e-commerce company, sources privy to the situation have revealed.

The state-owned investment company may help finance an offer in return for a bigger share of privately-owned Alibaba Group, according to a report on Bloomberg. The sources declined to be identified as the discussions are confidential, but one noted that Temasek is not interested in owning Yahoo.

The news agency noted that Temasek, Silver Lake and DST bought as much as US$1.6 billion of stock from Alibaba employees last month. The transaction valued the Chinese online marketplace company at US$32 billion, two people close to the situation said then.

The new arrangement between Alibaba and Temasek Holdings is set to be part of a possible takeover bid for Yahoo with private equity firm Silver Lake and Russia-based Digital Sky Technologies (DST), one of the sources told Bloomberg. Last week, Alibaba, Silver Lake and DST were said to be forming a group to propose an offer.

Silver Lake has also informed Yahoo of its efforts and is trying to line up financing to pursue the deal, Bloomberg reported. However, no clear deal structure has emerged, and a bid for Yahoo may not take place after all.

Yahoo's Goldman Sachs advisers are sending out selective financial data to certain parties, but the Internet giant does not require interested parties to sign confidential agreements. They have not created a so-called data room for bidders to "dig further" into Yahoo's business either.

When asked by Bloomberg to confirm the talks, Stephen Forshaw, a spokesperson for Temasek Holdings said: "We don't comment on market speculation."

Alibaba and Yahoo also declined to comment on the talks.

Shortly after firing Carol Bartz as CEO in September, the Internet giant and its longtime advisers at Allen & Co and Goldman Sachs began working on a strategic review, which included the possibility of putting itself, or parts of the business, for sale. To date, Microsoft and private equity firms Silver Lake Partners, Providence Equity Partners, Hellman & Friedman and Bain Capital have expressed interest in bidding for Yahoo. 

Yahoo's co-founder and former CEO Jerry Yang was reportedly interested in a deal with private equity firms that would take the US$20 billion company private.

Editorial standards