Alibaba may be considering an IPO in the US

Alibaba Group, the mainland's largest e-commerce company, could be saying "Open Sesame" to a public listing on the Nasdaq Stock Market if an afternoon meeting between the two parties was any indication.

Senior finance executives of the Hangzhou-based company, which is widely expected to be planning its initial public offering this year, held a closed-door discussion with a representative of the American exchange yesterday at an undisclosed venue in Hong Kong, two people familiar with the situation said.

The executives met Yeeli Hua Zheng, the Beijing-based chief representative in China for Nasdaq OMX, the operator of the Nasdaq exchange in New York.

"This meeting is significant because it suggests Alibaba could be actively exploring other public listing options besides Hong Kong," one of the sources said.

Speculation about Alibaba's plans to pursue an IPO later this year was fuelled by the decision of company founder Jack Ma Yun to step down as chief executive on May 10. Ma will remain the group's executive chairman.

That news came a few days after Ma announced in January that Alibaba was conducting a sweeping restructuring that would see it divided into 25 business units under the direction of two committees, one for strategy and one for operations. It has also been speculated that Alibaba was likely to choose Hong Kong for its IPO. That would mark a welcome return for the firm, which took its Hong Kong-listed unit, Alibaba.com, private in June last year.

The agreement hammered out last year between Alibaba and Yahoo for the Chinese company to buy back in stages the 40 per cent stake owned by Yahoo offered incentives for Alibaba to consider an IPO by late 2015.

Alibaba spokesman John Spelich, asked for comments about Alibaba executives' discussions with the Nasdaq representative, said: "We do not comment on our executive meeting schedules." A check with the Nasdaq OMX office in Beijing confirmed that Zheng was out on a business trip and could be back today.

After the completion in September of Alibaba's initial US$7.6 billion buy-back from Yahoo, JPMorgan estimated that Ma, certain senior management and private-equity investors, including China Investment Corporation, now held 45.1 per cent of the e-commerce giant.

Alibaba had an estimated valuation of US$40 billion, based on the loans it arranged for the buy-back and the privatisation of Alibaba.com.

Reports said this week that Alibaba was looking for a new US$8 billion loan, half of which was to refinance the US$4 billion in loans it arranged last year from a syndicate of banks for the privatisation and half for what one source said "general corporate purposes".

【Source:South China Morning Post】