Yahoo says to keep larger stake in Alibaba after its IPO
SAN FRANCISCO (Reuters) - Yahoo Inc said on Tuesday it will keep a larger stake in Alibaba Group Holding Ltd than originally planned after it goes public, hoping to profit from the Chinese e-commerce company's future growth.
Founded by billionaire Jack Ma, Alibaba is expected to file for an estimated $15 billion IPO in 2014, valuing the operator of retail, auction and content websites at more than $100 billion. The IPO is one of the most eagerly anticipated Internet debuts since Facebook Inc in 2012.
CEO Jonathan Lu said last week that Alibaba wanted a listing in the United States rather than in Hong Kong, which many had considered a more natural fit for the Chinese company.
Under the terms of an amended agreement that Yahoo announced alongside its quarterly results, the U.S. Internet company will sell up to 208 million of the 523.6 million Alibaba shares it owns, either directly to the Chinese company or through the IPO. That is down from a previously agreed maximum of 261.5 million.
After the IPO, Yahoo would have the right to sell its remaining Alibaba shares at its discretion, Yahoo said.
A spokesman for Alibaba said that the terms of the previous agreement, which permitted Yahoo to sell only after a one-year lock-up period following the IPO, would remain in force.
On Tuesday, Yahoo announced second-quarter results from Alibaba, in which it holds a 24 percent stake, underscoring the Internet, retail and content company's rapid growth.
Alibaba's revenue grew 61 percent to $1.74 billion in the April to June period, while net income jumped 159 percent to $707 million. That pace is down from 71 percent in the first quarter, but still exceeded BGC Partners analyst Colin Gillis' forecast for about 54 percent.
(Reporting by Edwin Chan; Editing by Bernard Orr and Andre Grenon)
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