HONG KONG China's e-commerce giant Alibaba Group Holding Ltd is planning a U.S. IPO in the third quarter of this year, people familiar with the matter told Reuters, in what is the expected to be a more than $15 billion deal.
The Hangzhou, China-based company, which controls about 80 percent of the country's e-commerce, had been in discussions with the Hong Kong stock exchange and the Securities and Futures Commission since last year about a potential listing, but the island city's regulators blocked its proposal as it violated the "one-share-one-vote principle".
After an initial rebuff, Alibaba and the Hong Kong regulators were back at the negotiating table late last year, to find a solution to the vexed problem. While the Hong Kong Exchanges and Clearing Ltd has initiated a review of its listing rules to accommodate more flexible structures, any change to the existing rules would take months.
Alibaba does not want to miss the technology boom, which has boosted valuations of Internet companies both in the United States and in Hong Kong. Alibaba's planned IPO would be the highest-profile Internet listing since Facebook Inc's $16 billion deal in 2012.
It was not entirely clear if talks between Alibaba and the Hong Kong regulators have completely ceased, but the chances of a Hong Kong listing looks increasingly unlikely, the people added.
The sources declined to be identified as the information is not public.
Alibaba could file listing documents with the U.S. regulators as soon as April, one of the people said. The deal is crucial for investment banks as it is estimated it will generate $260 million in underwriting fees, Reuters previously reported.
"There is no timeline, no venue selected nor have any underwriters been hired for an IPO event," an Alibaba spokeswoman said.
'NO CHANGE TO STRUCTURE'
The listing also is closely watched by Alibaba's two largest shareholders - Yahoo Inc which owns 24 percent and Japan's Softbank Corp which controls 37 percent. Alibaba's founders and some senior managers jointly own about 13 percent of the company, which analysts estimate is worth at least $140 billion.
Credit Suisse and Morgan Stanley are among the two banks poised to win top underwriting mandates, while other banks are also expected to join the syndicate, the people familiar with the matter added.
Alibaba's corporate structure allows a group of top partners to nominate and control the board, which is at odds with Hong Kong's stock exchange's listing rules.
Joe Tsai, Alibaba's executive vice chairman told Reuters in an interview this week the company would not change its partnership structure in order to list on the Hong Kong stock exchange.
"The one thing I can't understand is people think we're going to change our partnership structure just to accommodate a listing in Hong Kong, that's never going to happen," said Tsai.
Credit Suisse and Morgan Stanley did not reply to emails seeking comment.
(Reporting by Denny Thomas and Prakash Chakravarti at IFR/LPC; Additional reporting Elzio Barreto; Editing by Michael Flaherty and Robert Birsel)