Alibaba Intends To Buy Back Alipay Shares

Alipay P will greatly enhance the value of Alibaba, which is currently preparing for IPO (IPO) and is expected to become one of the largest IPO pactions in the history of the United States.

But people familiar with the matter say that even if the repurchase agreement is reached, it is unlikely to be completed before Alibaba IPO, and it may face scrutiny by Chinese regulators.

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< p > Alipay plays an important role in dealing with e-commerce payment services for Alibaba group.

In addition, Alipay has entered the field of financial services, and now controls the largest Monetary Fund in China with a volume of $87 billion.

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Less than P, people familiar with the matter said that one of Alibaba's negotiations with major shareholders was to buy 1/3 of Alipay's shares.

Another person familiar with the matter said that changing the ownership structure is still a concept and no specific timetable.

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< p > when the matter is less than a href= "//www.sjfzxm.com/news/index_c.asp" > Alibaba < /a > preparations for listing in the US, the company is expected to raise more than US $20 billion through IPO this summer.

Because the amount of financing is very high, it is necessary to fully mobilize the interest of investors to sell stocks at a high price.

The direct stake in Alipay will certainly help to achieve this goal, so that Alibaba's future shareholders will enjoy Alipay's growth bonus.

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< p > > a href= "//www.sjfzxm.com/news/index_c.asp" > Alipay < /a > did not disclose profits and revenues.

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< p > the relationship between Alibaba and Alipay has been controversial.

Ma Yun split the Alipay from the Alibaba in 2011, on the grounds that only in this way can the payment license be obtained.

Alibaba did not notify shareholders of the matter until the paction was completed, triggering dissatisfaction among major shareholders such as YAHOO, who thought it squeezed the value of its holdings.

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< p > Alibaba responded by saying that the board of directors of the company had discussed the possibility of over demolition, while YAHOO co founder Yang Zhiyuan also had a seat on the board of Alibaba.

Alibaba later reached an agreement with YAHOO and Softbank, the two largest a href= "//www.sjfzxm.com/news/index_c.asp" shareholder /a.

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< p > Alipay is currently controlled by a parent company holding 46% of Ma Yun's holdings. The other shares of the parent company are held by several other Alibaba co founders.

Alipay's balance treasure is also controlled by this parent company.

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< p > Softbank holds 37% of Alibaba shares, YAHOO holds 24% of the shares, and Ma Yun's shareholding is about 7%.

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When p was broken up in 2011, Alipay reached an agreement with Alibaba. If Alipay went public, it would pay 2 billion to 6 billion US dollars to Alibaba.

The agreement also prevents Alipay from charging excessive fees to Alibaba through relevant provisions.

The ownership structure currently under negotiation will replace the previous framework agreement.

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< p > changing ownership structure will solve the hidden problems of corporate governance left over in 2011, and help to alleviate investors' concerns about potential benefits disputes.

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< p > the main value of Alibaba comes from its Taobao and Tmall mall. These two platforms occupy 80% of the total market share of China's consumer e-commerce market.

Most of Alibaba's revenue came from this, reaching $8 billion in 2013, up 62% from $4 billion 900 million in 2012.

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Carlos Coquina P Bernstein Research Analyst (Carlos Kirjner) believes that the valuation of Alibaba is between 240 billion and 250 billion dollars, which includes only 6 billion dollars of Alipay value.

In view of this, if Alipay's ownership changes, it will further enhance the valuation of Alibaba.

However, since Alipay did not disclose its financial performance and Alibaba did not directly share shares, bankers had been unable to assess the value of the business.

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