Alibaba Group Holding Ltd Plans US IPO Within The Year

Alibaba Group Holding Ltd Plans US IPO Within The Year

An initial public offering is being planned by the Alibaba Group Holding Ltd in the United States by the third quarter, according to sources familiar with the plan. The IPO is expected be valued over $15 billion.

The e-commerce giant from China also discussed with Securities and Futures Commission and the Hong Kong exchange for a possible listing. However, regulators opposed the proposal since it violated the one vote per share principle of the island city. Following the rejection, discussions were restarted in an effort to resolve the issues surrounding its possible listing. Although a review of the listing rules was done by the Hong Kong Exchanges and Clearing Ltd for possible adjustments, changes may take some time before they can be implemented.

The company aims to take advantage of the technology boom that increased the value of internet-based companies in Hong Kong and the United States. The planned IPO of Alibaba will be another high-profile internet listing similar to the $16 billion listing of Facebook in 2012.

Even as it remained uncertain if the discussions between Hong Kong regulators and the company have already stopped, it appears the listing has remained doubtful. The listing documents of the company may be filed with US regulators by April. The deal is expected to generate around $260 million worth of underwriting fees for investment banks.

Softbank Corp and Yahoo Inc, two biggest shareholders of the company, are closely monitoring the listing. Topping the list of banks that may get the underwriting mandate are Morgan Stanley and Credit Suisse.

The corporate structure of the company that allows the nomination and control of the board by the top partners of the company is in conflict with the listing rules of the Hong Kong stock exchange. However, the company is not bent on changing its partnership structure to be able to be listed on the Hong Kong stock exchange, according to Alibaba executive vice chairman Joe Tsai.

Posted by James Fried on Wednesday March 19 2014, 11:09 AM EDT. Ref: Reuters. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0