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Minority Alibaba.com shareholders back buyout offer

by Andrew Bulkeley  |  Published May 25, 2012 at 8:37 AM
AlibabaDOTcom227x128.jpgMinority shareholders of Alibaba.com Ltd. on Friday, May 25, approved an offer from parent Alibaba Group Holding Ltd. to take the company private to speed a restructuring of the listed business-to-business unit of the Chinese Internet empire.

The investors approved the HK$13.50 per-share offer, which was announced in February and gives shareholders a 46% premium to the last trading day before the offer was unveiled. Buying the entire 27% of Alibaba.com outstanding will cost the parent HK$19.6 billion ($2.53 billion).

"Approximately 95% of the shares held by independent shareholders voting in person or by proxy were voted in favor of the [offer] and a majority of the shareholders voting in person or by proxy on a headcount basis also voted in favor," Alibaba.com said.

Alibaba.com, a Chinese e-commerce platform owned by billionaire Jack Ma, is working to get back on track after serial fraud dented customer confidence. In response, Alibaba.com has shifted its focus from luring more sellers to its site to wooing more buyers, who will then be encouraged to spend more.

Alibaba.com's board last month recommended the offer to shareholders.

The fall from grace follows Alibaba'com's 2007 initial public offer, which was the biggest Internet IPO since Google Inc.'s 2004 debut.

Despite the premium, the buyout offer comes at the same price as Alibaba.com's IPO price. The parent itself is slowly preparing for its own listing but has said that is still several years off.

Alibaba Group Holding on Sunday agreed to buy back half of a 40% stake in itself owned by Yahoo! Inc. Hangzhou, China-based Alibaba Group Holding is likely to pay $6.3 billion in cash and contribute up to $800 million in preferred Alibaba Group Holding shares.

Rothschild, Credit Suisse Group and Deutsche Bank AG are advising Alibaba Group Holding. HSBC Bank plc handled financial details for Alibaba.com, which is taking legal counsel from Slaughter and May.

Somerley Ltd. is advising Alibaba.com's board.
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Tags: Alibaba.com | China | M&A

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