Private equity firms looking to invest into Alibaba Group have relieved pressure on Chairman Jack Ma to stage a speedy IPO by allowing a way for employees to sell their shares to willing buyers.
Shares of Alibaba.com, the only listed unit of the group, bucked a selloff in the broader market to close 2.8 percent higher after three private equity firms said they were looking to buy shares in Alibaba Group.
Yunfeng Capital, Silver Lake and DST Global said on Thursday they will buy shares in China's largest e-commerce group by leading a tender offer for employee shareholders, option holders and certain other shareholders of Alibaba Group.
Yunfeng Capital was co-founded by Ma.
The transaction would give Alibaba an enterprise valuation of $32 billion, the tech blog AllThingsD said, adding the group would get a stake of just under 5 percent if the offer is fully subscribed.
They (Alibaba employees) are anxious for some sort of IPO, so it's wise of Jack Ma to give these guys some liquidity, said Michael Clendenin, managing director of Shanghai-based technology consultancy RedTech Advisors.
This doesn't add investment to Alibaba because Alibaba doesn't need it. It's just a swap that certainly takes pressure off IPO in the near term.
The move may also help Ma in his quest to buy back a portion of all of Yahoo Inc's stake in his company as Silver Lake was reportedly considering a bid for Yahoo.
Silver Lake is looking at Yahoo as a buyout target so to be closer to Jack and really see what he's thinking makes a lot of sense. They may want to know what Jack be willing to pay for a part of Yahoo's stake in Alibaba, Clendenin said.
It was reported earlier this month that Silver Lake is considering a bid for Yahoo that would see Silver Lake sell of Yahoo's Asian assets.
Yahoo is worth about $17 billion, with much of that ascribed to its roughly 40 percent stake in Alibaba Group, and has had a tumultuous relationship with Ma under its former chief executive Carol Bartz.
Japanese technology company Softbank Corp also owns about 30 percent of Alibaba Group.
Ma said the latest move was aimed at increasing liquidity options for employees.
This liquidity program will allow our people to focus on growing our business and continuing to create value, he said in a statement.
We believe the high-quality investors making commitments to this important program share our mission and philosophy, and we welcome them as shareholders of the company.
Yahoo will not be selling shares in the offer, AllThingsD said.
Chinese sportswear maker Dongxiang Group will invest $100 million in Yunfeng Capital, while Chinese online game developer Giant Interactive will also invest $50 million into Yunfeng Capital.
Singapore-based investment firm Temasek, a shareholder in Alibaba Group, is also taking part in the offer.
Alibaba Group is also the parent company of Taobao Mall, Taobao and AliCloud.
Alibaba.com shares rose as much as nearly 7 percent on Friday before closing up 2.8 percent. The broader market fell 1.4 percent.
(Additional reporting by Denny Thomas and Farah Master in HONG KONG; Editing by Anshuman Daga)