PE investors set for partial exits as Alibaba targets $24b IPO

Alibaba said in a regulatory filing that it would sell 320.1 American Depositary Share (ADS) at $60-$66 apiece, putting the company on course to raise $19.2-21.1 billion. Including the extra shares set aside for underwriters, the total sum could reach $24.3 billion.

The shares are expected to begin trading on the New York Stock Exchange (NYSE) later this month, under the symbol "BABA."

Yahoo is the biggest exiting shareholder, selling 121.7 million shares - or 4.9% of the company - from its current 22.4% holding. China Investment Corp. (CIC) will offload 14.28 million shares, reducing its holding from 2.8% to 2.1%, while Silver Lake will see its stake fall from 2.5% to 2.2% through the sale of 4.1 million shares.

Yunfeng Capital - a private equity firm co-founded by Jack Ma, Alibaba's founder and chairman - will sell 6.5 million shares, reducing its interest from 1.5% to 1.1%. CITIC Capital will trim its stake from 1.1% to 0.8% after selling 4.9 million shares.

Other shareholders planning to make partial exits include China Development Bank International, which will reduce its interest from 0.5% to 0.2%, and Boyu Capital, which will trim its holding from 0.6% to 0.5%. Asia Alternatives Management, Temasek Holdings' Pavilion Capital and Siguler Guff will also sell shares.

Ma, who currently owns 8.8% of the company, will offload 12.75 million of his 206.1 million shares for a personal windfall of $765-841.5 million. Meanwhile, Joseph Tsai, Alibaba's co-founder and vice chairman, will sell 4.25 million of his 83.5 million shares, reducing his holding from 3.6% to 3.2%.

Japan's Softbank, which is the single largest shareholder with a 32% stake, will not sell any shares in the IPO.

Yahoo acquired a 40% stake in the Chinese company in 2005 for $1 billion. It exited approximately half of this holding in 2012 when Alibaba completed a share buyback worth $6.3 billion in cash, $800 million in preference shares, and $550 million in patent and licensing payments.

The group recorded net profits of $1.99 billion in the second quarter this year, while it posted of $2.54 billion in revenue, up 46.3% year-on-year. The company filed the registration documents for an IPO early in May.

Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley and Citigroup are acting as joint bookrunners for this offering.

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• Topics
• Greater China
• Exits
• Consumer
• Technology
• China
• USA
• IPO
• Exit
• CIC
• e-commerce
• TMT
• Alibaba Group
• Silver Lake
• Yunfeng Capital
• CITIC Capital
• Boyu Capital
• China Development Bank
• Temasek Holdings