ALIBABA.COM Ltd shares yesterday rose the most in more than four years after they resumed trading following an announcement that parent Alibaba Group will take it private for US$2.5 billion at its initial public offering price.

Alibaba.com closed at HK$13.20 (US$1.70) yesterday in Hong Kong, the highest since mid-July last year, a 42.7 percent surge since the stock closed on February 8 when it was suspended from trading to await the privatization announcement.

China's largest e-commerce firm Alibaba Group said yesterday that it planned to take the Hong Kong-listed unit private, stressing the move was unrelated to any possible deal to buy back shares owned by Yahoo! Inc.

Investors are being offered HK$13.50 in cash per share, the same as its IPO price in 2007.

"Export-oriented companies are facing huge challenges in raw materials, exchange rates and labor costs, and we need to upgrade and transform our B2B business model," Alibaba Group chairman and CEO Jack Ma said in a letter to employees.

"We have decided to privatize the B2B business unit to be responsible to our shareholders and better serve our clients," he added.

There have also been reports that the Alibaba Group was in separate talks with Yahoo Inc to buy the 40 percent stake the US company owns in the e-commerce group.

Lu Bowang, president and chief analyst of China IntelliConsulting Corporation, said: "Privatizing Alibaba.com will allow Alibaba Group to better merge the unit with its online retail business."