Alibaba’s Jack Ma wants to buy Yahoo

The US internet firm holds a 40% stake in Alibaba and Ma has previously said he would be keen to buy out this interest, Reuters reported. But when questioned by an audience at Stanford University on his ambitions, said he wanted "the whole piece of Yahoo," adding, "China is already ours, right? It's already in my pocket."

Ten days ago, Silver Lake and DST Global said they would invest in Alibaba alongside Chinese private equity firm Yunfeng Capital, which was founded by Jack Ma, and Singapore sovereign wealth fund Temasek Holdings, an existing investor in the Chinese firm. The transaction, structured as a tender offer to employee shareholders and option holders as well as certain other shareholders, is said to be worth up to $1.6 billion. It values Yahoo's holding in Alibaba at nearly $13 billion.

The timing of the investment was intriguing because it came a matter of days after Silver Lake reportedly contacted Yahoo as one of several private equity firms considering a bid for the US internet company. Yahoo's future is uncertain following the sacking of CEO Carol Bartz, with the board now thought to be considering the sale of all or part of the company.

Sources told AVCJ that there was no connection between the two situations because Alibaba's negotiations with Silver Lake predate Bartz's departure from Yahoo.

Private equity players looking at the US internet firm have indicated that they would only consider making an offer for the company if the Asian assets - the Alibaba stake plus a 35% holding in Yahoo Japan - were sold, creating a smaller and simpler acquisition, The Wall Street Journal reported. At the same time, Yahoo's directors are said to have ruled out a spinoff of the Asian business into a separate company due to regulatory concerns and the potential tax liability such a move might incur.

Softbank Holdings and Yahoo invested in Alibaba in 2005, with the latter taking a 40% stake in exchange for $1 billion and control of its China-based assets. Alibaba has since prospered, with assets including Hong Kong-listed B2B trading platform Alibaba.com and online shopping websites Taobao Marketplace and Taobao Mall.

However, relations with Yahoo have soured. The two companies clashed last year over Ma's decision to spin out third-party payment provider Alipay into a separate company under his control. Ma was responding to a regulatory clampdown on foreign participation in the third-party payment industry, but he acted without board approval.

Ma told the Stanford University audience that he hadn't visited Yahoo to discuss any potential deal since he arrived in the US 15 days ago. He plans to spend the next year in the US learning more about the country and the market.

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• Topics
• North America
• Greater China
• Technology
• Jack Ma
• Silver Lake
• Temasek Holdings
• Yunfeng Capital
• Alibaba Group
• M&A