Chinese e-commerce giant Alibaba Group Holding Ltd (阿里巴巴) is in talks with key shareholders to regain a formal stake in its online payment affiliate, Alipay.com Co (支付寶), as it prepares a hotly anticipated initial public offering (IPO), a report said yesterday.
The Wall Street Journal cited “people familiar with the matter” for the report carried on its Web site.
The Journal said that retaking the stake in Alipay “could significantly raise the future value of Alibaba” as it readies its IPO.
However, it reported the unidentified sources as saying that even if a deal over the stake in Alipay is clinched, it was unlikely to come before the scheduled IPO. A deal would also be subject to review by regulators in China, the report said.
It described Alipay as “central to Alibaba’s operations,” as it handles the company’s e-commerce payments, similar to the relationship between PayPal and eBay Inc. Analysts say the forthcoming listing is expected to raise about US$10 billion, which would make it the technology industry’s largest IPO since Facebook’s in 2012.
Alibaba operates China’s most popular online shopping platform, Taobao.com (淘寶網), which features hundreds of millions of product listings.
Last week Alibaba and a private equity fund backed by its founder Jack Ma (馬雲) said they would pay US$1.22 billion for a stake in China’s leading online video platform, YoukuTudou.com (優酷土豆).
The move comes as Alibaba diversifies beyond its traditional online shopping business through a string of acquisitions.
Ma spun off Alipay from the group in 2011, the Journal said, saying the move was needed for the payment company to get a license in line with Chinese government regulations to keep doing business.
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