Alibaba Group Proposes Stock Buy-Out, Delisting, For its B2B Site

At an Alibaba Group board meeting which has just finished, the e-commerce giant proposed an offer to delist its B2B site Alibaba.com (HKG:1688) from the Hong Kong Stock Exchange after a massive stock buy-back. The proposal is that the company will pay HK$13.50 in cash per share, which is a premium of 60.4 percent over its last 60-day trading average closing prices.

Alibaba.com, which is a platform for Chinese suppliers to sell to local and global businesses, is 73 percent-owned by Alibaba Group. Alibaba.com shareholders will soon receive a paper containing all the details and be invited to vote on the offer.

Why delist at this time? In an announcement issued shortly after the meeting ended, the group’s founder and CEO, Jack Ma, explained:

Taking Alibaba.com private will allow our company to make long-term decisions that are in the best interest of our customers and that are also free from the pressures that come from having a publicly-listed company. With this offer, we provide our shareholders a chance to realize their investment now at an attractive cash premium rather than waiting indefinitely during this period of transition.

The “transition” mentioned there ostensibly refers to the major changes on the B2B e-commerce site, such as a greater international push and onsite visits and checks on its Chinese suppliers.

Just last week, shareholders of Shanda (NASDAQ:SNDA; FRA:RZP) voted overwhelmingly in favour of a very similar proposal which will soon see Shanda Interactive delist from NASDAQ and go private.

Yahoo (NASDAQ:YHOO) owns 40 percent of Alibaba Group. In a separate turn of events, it’s believed that Jack Ma and his execs are trying to buy back that share from the US search engine.