Alibaba.com shares rose as much as 7 percent on Friday after three private equity firms said they were looking to buy shares in its parent, Alibaba Group, a move analysts say takes the heat off Alibaba Chairman Jack Ma for a speedy IPO.
Yunfeng Capital, Silver Lake and DST Global said on Thursday they will buy shares in China's largest e-commerce group Alibaba 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, analysts say. Media reports this month said Silver Lake was considering a bid for Yahoo.
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.
This liquidity program will allow our people to focus on growing our business and continuing to create value, Ma 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 said it will invest $100 million in Yunfeng Capital. 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 were up 3 percent by 11:25 p.m. EDT in a broader market down 2 percent. The shares rose as much as 6.9 percent in early trade.
(Additional reporting by Denny Thomas; Editing by Anshuman Daga)