UPDATE 3-Alibaba seeks buyers for Yahoo-owned stake--source
(Adds roadshow detail)
SAN FRANCISCO, March 19 (Reuters) - China's Alibaba Group is seeking investors to buy the 39 percent stake in the Internet company held by Yahoo Inc (YHOO.O), a person with direct knowledge of the situation said on Tuesday, outlining a plan that could stop Microsoft Corp (MSFT.O) from getting the Alibaba stock.
Alibaba's move indicates it thinks Microsoft is likely to win its $42.4 billion bid to buy Yahoo, in which case the Chinese company would prefer increased independence, the person said. The source did not want to be identified because of the sensitivities surrounding the discussions.
Alibaba believes a 2005 agreement with Yahoo gives it a "right of first offer" to buy Yahoo's stake, which would be invoked if Microsoft buys Yahoo, the source said.
Meanwhile, Yahoo's top three executives, Chief Executive Jerry Yang, President Susan Decker and Chief Financial Officer Blake Jorgensen, have begun a roadshow to shore up support with major U.S. institutional investors and prove the Microsoft offer is too low, another source familiar with the plan said.
Yahoo declined to comment on the Alibaba talks and Microsoft was not immediately available for comment.
An Alibaba spokeswoman said the company had no comment.
Alibaba's Hong Kong-listed shares were up 11.5 percent at HK$13.60 by the midday recess, after they lost more than one-fifth of their value to fall below their IPO price on Tuesday, as investors fretted over its exposure to a slowing U.S. economy.
Alibaba has hired Deutsche Bank and law firm Wachtell, Lipton, Rosen & Katz as advisers, the person said.
Under a 2005 deal, Yahoo merged its Chinese operations into Alibaba in exchange for the 39 percent stake in Alibaba Group, which Yahoo continues to hold.
Late last year, Alibaba spun off an interest in its core business-to-business e-commerce site, Alibaba.com Ltd, which held a successful initial public offering on the Hong Kong stock market. (Additional reporting by Eric Auchard in San Francisco and Sophie Taylor in Shanghai; Editing by Gary Hill and Tomasz Janowski)
- Washington, DC city council raises minimum wage to $11.50/hr in 2016
- Winning ticket sold in California for Mega Millions lottery: official
- India removes barriers to U.S. embassy as anger grows over diplomat's arrest
- UPDATE 5-Mega Millions lottery winning tickets sold in California, Georgia -Officials
- U.N. told up to 500 killed in South Sudan clashes: diplomats