(Adds roadshow detail)
By Anupreeta Das
SAN FRANCISCO, March 19 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'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
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
(Additional reporting by Eric Auchard in San Francisco and
Sophie Taylor in Shanghai; Editing by Gary Hill and Tomasz