Silver Lake Management LLC, the biggest technology-focused buyout firm, stands to make more than 550 percent on Alibaba Group Holding Ltd (阿里巴巴) after the Chinese e- commerce giant’s record-breaking initial public offering, a person familiar with the matter said.
Alibaba closed at US$93.89 a share in its first trading day on Friday on the New York Stock Exchange after pricing its US$21.8 billion IPO at US$68, giving Silver Lake a paper gain of about US$4.6 billion.
The firm and its affiliates injected US$825 million into Alibaba, including US$447 million from Silver Lake’s third buyout fund in late 2011, said the person, who requested anonymity because the information is private.
Alibaba’s IPO, the biggest ever for a technology company, has proved to be a windfall for the company’s executives and backers such as Silver Lake, which manages US$23 billion in assets.
Private-equity firm General Atlantic LLC stands to make a larger multiple of its money. The New York-based firm invested about US$75 million in Alibaba in November 2009, said a person with knowledge of the matter, after being introduced to the company the previous year. General Atlantic did not sell shares in the offering and now controls a stake valued at more than US$2 billion, the source said.
“I expect we’re going to be shareholders for a very long time,” General Atlantic managing director Anton Levy, who led the firm’s investment in Alibaba, said by telephone on Friday, while declining to comment on the value of its stake. “The team at Alibaba has continued to exceed expectations.”
Japan’s Softbank Corp, Alibaba’s biggest shareholder, did not plan to sell shares in the offering.
Its stake of about 798 million shares was valued at US$75 billion on Friday. The company’s second-largest owner, Yahoo Inc, sold about a quarter of its stake for more than US$8 billion, reducing its interest to 16 percent from 22 percent.
Meanwhile, MediaTek Inc (聯發科), Taiwan’s biggest handset chip designer, has invested about US$80 million (NT$2.4 billion) to take a 0.05 percent stake in Alibaba.
MediaTek said on Friday that the investment — through its wholly owned subsidiary Gaintech Co Ltd (訊發) — aims to capitalize on the fast-growing e-commerce business in China and showed its faith in the sector in China in the medium and long term.
In addition to an upbeat mood about Alibaba’s earnings prospects in the long run, MediaTek said that it has built closer business ties with the Chinese firm, hoping that with the arrival of the Internet of Things era, both sides can work together for a higher market share.
Both Fubon Financial Holding Co (富邦金控) and Cathay Financial Holding Co (國泰金控) have each invested US$28.90 million and US$29.14 million respectively, to hold a 0.02 percent stake in the firm.
Additional reporting by CNA
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