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CORRECTED - UPDATE 2-Yahoo sells $150 mln shares of China's Alibaba.com
September 14, 2009 / 9:31 AM / 8 years ago

CORRECTED - UPDATE 2-Yahoo sells $150 mln shares of China's Alibaba.com

(Deletes stock quote in paragraph 8 to correct erroneous date)

* Yahoo selling its entire 1.14 pct interest in Alibaba.com

* Selling 57.48 mln shares at HK$19.80-20.30 each

* Price is a 4-6.4 pct discount to Monday closing price

* Yahoo to still hold 40 pct stake in parent company (Add analysts comments and details)

By Alison Liu and Melanie Lee

HONG KONG/SHANGHAI, Sept 14 (Reuters) - Yahoo Inc YHOO.O is selling its entire 1.14 percent stake in Alibaba.com 1688.HK, China’s largest business-to-business internet marketplace, for about $150 million, nearly two years after the company went public.

Yahoo still holds a 40 percent stake in the unlisted parent company, Alibaba Group, co-founded by Chinese entrepreneur and former English teacher, Jack Ma.

The U.S. search engine is selling 57.48 million shares of Alibaba.com at HK$19.80-20.30 each, according to a term sheet obtained by Reuters on Monday. The price range represents a 4-6.4 percent discount to the stock’s closing price of HK$21.15 on Monday.

Analysts said Yahoo’s move would put pressure on Alibaba.com’s stock, amid signs that its valuation has stretched well beyond its peers.

“I think it is negative for the share price not just because this is a profit taking activity, but it reflects some heightened risks (they may have) about the fundamentals of the business,” said Steven Liu analyst with DBS Vickers.

Yahoo paid more than $1 billion in 2005 as part of its investment into Alibaba Group.

Alibaba.com raised $1.49 billion in its October 2007 IPO in Hong Kong, pricing the issue at HK$13.50 per share, with Yahoo buying a portion of the offering at the time.

After dropping steadily in 2008, Alibaba shares have come charging back this year, nearly quadrupling since January.

“We are pleased to learn of the Yahoo! decision because having broader ownership of Alibaba.com with increased liquidity and support among institutional investors is what Alibaba.com hoped to achieve when it released the cornerstone investors,” said John Spelich, vice president of Alibaba Group’s international corporate Affairs.

Last month, Alibaba Group announced a restructuring of its China Yahoo business by separating Koubei.com, a classified-listings Web site, from China Yahoo and transferring the unit into its retail Web site, Taobao.com.

Alibaba Group owns about 74 percent of Alibaba.com.

UBS AG UBSN.VX handled the sale of the shares.

Ma also sold 13 million of his shares, or less than 5 percent of his total direct and indirect holding, in the company for about $35 million last week.

1=HK$7.75 Additional reporting by Donny Kwok, Alison Leung and Michael Flaherty; Editing by Chris Lewis and Simon Jessop

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