China web giant Alibaba gears up for U.S. IPO

The China-based Alibaba had previously abandoned plans for an IPO in Hong Kong. (File photo: Reuters)

Chinese e-commerce giant Alibaba said Sunday it has started the process to go public on a U.S. stock exchange in what is likely to be the world’s biggest IPO this year.

The Alibaba Group’s statement confirming plans for an initial public offering in New York ended months of speculation over where the company would list its shares after talks for a Hong Kong stock sale fell apart last year.

The company said in the brief statement posted on its corporate blog that it has “decided to commence the process” of a U.S. IPO.

It gave no details about the plan for the IPO, which it said would make Alibaba “a more global company” and “enhance the company’s transparency.”

Analysts have estimated that an Alibaba IPO could raise up to $15 billion and value the company at more than $100 billion.

Hangzhou, China-based Alibaba had previously abandoned plans for an IPO in Hong Kong because the semiautonomous Chinese financial center’s stock exchange refused to change its rules to accommodate the company’s unusual management structure.

The company failed to persuade the Hong Kong exchange to grant it an exception from listing rules so that it could maintain a “partnership” structure that lets top executives, who own 10 percent of the company, retain control of the board.

The company hinted that the door has not completely shut on listing its stock in Hong Kong.

“Should circumstances permit in the future, we will be constructive toward extending our public status in the China capital market in order to share our growth with the people of China,” the statement said.

Founder Jack Ma, a charismatic former English teacher, started Alibaba in 1991 as a platform linking Chinese suppliers with retailers abroad, and later expanded into consumer e-commerce with the Taobao and Tmall platforms. Its websites are among the world’s busiest online outlets.

Yahoo owns 24 percent of Alibaba while Japan’s Softbank owns 35 percent.

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Last Update: Wednesday, 20 May 2020 KSA 09:42 - GMT 06:42
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