GIC, Temasek buy $1b of Alibaba shares from SoftBank

According to a statement, GIC and Temasek each purchased $500 million worth of Alibaba shares at $74 apiece through their individual investment vehicles. Alibaba agreed to repurchase $2 billion of its own stock at the same price, while the company's partnership of senior executives and founders bought another $400 million worth of shares.

Separately, SoftBank has offered $5.5 billion in mandatory exchangeable trust securities, which can be exchanged for Alibaba shares in three years. SoftBank will remain Alibaba's largest shareholder after the transaction, although its interest will be reduced to 28% from previous 32%.

SoftBank Group had said that it would sell at least $7.9 billion of shares in Alibaba to help boost the firm's liquidity and improve its leverage ratio. This marked SoftBank's first sale of Alibaba stock since its initial investment in Alibaba in 2000. It put in $20 million at the time and has since re-upped a number of times.

"As SoftBank looks to strengthen its own balance sheet, Alibaba determined that it was the best use of our capital to re-invest in our own business through an efficient buyback of a large number of shares in our own company that is accretive to our stockholders," Jack Ma, executive chairman of Alibaba, said in a separate statement.

Alibaba raised a $25 billion US IPO - the largest ever seen - in September 2014. The offering represented a significant liquidity event for a string of private equity and strategic investors, including Yunfeng Capital, CITIC Capital, Boyu Capital and Temasek. Yahoo was the biggest seller in the offering, generating $8.3 billion. It now owns a 15.4% stake in Alibaba.

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• Topics
• Greater China
• Open market
• Technology
• Consumer
• China
• Alibaba Group
• Softbank
• Exit
• GIC Private
• Temasek Holdings
• TMT