Alibaba.com Share Trading Suspended; Parent Group May Buy Back Yahoo Stake

Trading in Alibaba.com Ltd shares was suspended on Thursday, pending an announcement regarding its parent, Chinese e-commerce giant Alibaba Group ALIAB.UL, which is reportedly planning to buy back the 40 per cent stake in it held by Yahoo! Inc.

The statement gave no further details, and a spokesman at Alibaba Group, founded by billionaire entrepreneur and former English teacher Jack Ma, declined to comment.

Yahoo! Chairman Roy Bostock and three other directors will step down as the struggling Internet company ploughs ahead with an internal overhaul, including talks on what to do with its stakes in China's Alibaba Group and Yahoo! Japan Corp.

Sources told Reuters last month that Alibaba Group was planning to raise $3 billion via a loan, which it would use to buy back part of the 40 per cent stake held by Yahoo!. The sources said then that Alibaba was looking to put together a group of 6-7 banks by early February.

Yahoo's stake in Alibaba Group could be worth up to $13 billion, based on the $1.6 billion paid for a 5 per cent stake in Alibaba by Yunfeng Capital, Silver Lake and other investors in November.

There has also been some speculation the planned fundraising may be aimed at delisting Alibaba.com, a possible precursor to listing the parent company, though many analysts dismissed such a move as being too costly and unnecessary.

Reuters reported in December that Blackstone Group LP and Bain Capital were preparing a bid for all of Yahoo!, with Alibaba among its partners for an around $25 billion deal. Japan's Softbank Corp was also part of the consortium.

Shares in Alibaba.com rose 5.5 per cent on Wednesday, the biggest one-day per centage gain in more than 11 weeks. The stock closed at HK$9.25, its highest close since November 15.