while Alibaba eyes buyback

Date:2011-10-11hanyue  Text Size:

ALIBABA Group Holding Ltd has held talks with Singapore's Temasek about providing financing to buy the 40 percent stake in the company held by Yahoo! Inc, according to sources.

Temasek, a Singaporean state-owned investment company, may help fund an offer in return for a bigger share of privately owned Ali-baba, sources said yesterday.

Yahoo's 40 percent stake in Alibaba may be worth about US$13 billion, using a valuation by the Singapore investor last month.

Temasek's backing would aid Alibaba Chairman Jack Ma's bid to gain more control of the company he founded and increase its investments in China. Temasek, which manages a portfolio of about S$193 billion (US$147 billion), said in July that it is "bullish" on China and is seeking more deals there.

Victor Yip, an analyst at UOB-Kay Hian in Hong Kong, said: "As an existing investor in Alibaba, Temasek may be interested in increasing its ownership. This is just one of the many proposals flying around involving Yahoo."

The potential to buy Yahoo out of Alibaba, China's biggest e-commerce company valued at around US$32 billion, arose after Yahoo fired Chief Executive Carol Bartz and started a strategic review.

Bartz last year turned down efforts by Alibaba to buy shares held by Yahoo, straining relations with Ma.

In 2005, Yahoo paid US$1 billion, together with its operations in China, to acquire its holding in Alibaba.

Alibaba offered to buy some of the shares held by Yahoo last year, with the companies failing to come to an agreement as talks ended in June 2010.

Ma said in May that the breakdown in the discussions undermined his confidence in Yahoo.

Temasek, private-equity firm Silver Lake Partners and Russia's Digital Sky Technologies offered to buy as much as US$1.6 billion of Alibaba stock from the Chinese company's employees last month, two sources said at the time. The transaction values Alibaba at US$32 billion, the people said.

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