Alibaba seeks to buy back stake held by Yahoo

Trading in shares of Alibaba.com was halted yesterday pending an announcement regarding its parent, Chinese e-commerce giant Alibaba Group, which reportedly plans to buy back the 40 per cent stake in it held by Yahoo. Sources told Reuters last month that Alibaba Group, founded by former English teacher and now billionaire Jack Ma, was looking to raise a $3-billion (Dh11.01 billion) loan, which it would use to buy back part of the Yahoo-held stake. The sources said Alibaba aimed to put together a group of 6-7 banks by early February. Thomson Reuters' LPC service reported last week that six banks — ANZ, Credit Suisse, DBS, Deutsche Bank, HSBC and Mizuho Corporate Bank — were forming a mandated lead arranger group to back the $3-billion financing, citing market sources. Yahoo's stake in Alibaba Group could be worth up to $13 billion, based on the $1.6 billion paid for a 5 per cent stake in Alibaba by Yunfeng Capital, Silver Lake and other investors in November. Article continues below Alibaba.com gave no further details in a statement to the Hong Kong stock exchange, and a spokesman at Alibaba Group declined to comment yesterday. Shares in Alibaba.com jumped 5.5 per cent on Wednesday, the biggest one-day per centage gain in more than 11 weeks, with some speculation a deal could come through, and some talk it could involve taking the listed unit private. The stock closed at HK$9.25, its highest close since November 15. Yahoo board changes "The company may want to clarify in response to market speculation that Alibaba will buy back shares from Yahoo," said Alicia Hu, analyst at Daiwa Securities Markets in Hong Kong. Still, the announcement this week that Yahoo chairman Roy Bostock and three other directors will step down, following the hiring of new Yahoo CEO Scott Thompson, meant the company would likely need time to commit to any moves, Hu said. Complex alliances Alibaba, Yahoo and Japan's Softbank, which owns a 30 per cent stake in Alibaba and is a partner in Yahoo Japan, have been looking to unwind their complex web of relationships. Under pressure from investors, Yahoo's board has been considering various options to turn around the struggling company, including restructuring its valuable Asia holdings. There has also been speculation the planned Alibaba fund raising may be aimed at delisting Alibaba.com, a possible precursor to listing the parent company, though many analysts dismissed such a move as being too costly and unnecessary. Reuters reported in Dec-ember that Blackstone Group and Bain Capital were preparing a bid for all of Yahoo, with Alibaba and Japan's Softbank among its partners, for an around $25-billion deal.