Alibaba.com Board Votes in Favor of Privatization Proposal at HK$13.50/Share
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An Independent Board Committee of Alibaba.com Limited and the independent financial advisor appointed by the Independent Board Committee to evaluate a privatization proposal have come to the view that the proposal is fair and reasonable as far as independent shareholders are concerned and recommended that they vote in favor of the proposal.
“We consider the terms of the privatization proposal to be fair and reasonable. We advise the Independent Board Committee to recommend to independent shareholders that they vote in favor of the proposal,” said Somerley, the independent financial advisor.
“The Independent Board Committee, having considered the terms of the privatization proposal and having taken into account the opinion of Somerley, recommends the independent shareholders vote in favor of the resolution to approve the proposal,” said Walter Kwauk and Niu Gen Sheng, the two independent non-executive directors forming the Independent Board Committee.
The proposal offers minority shareholders HK$13.50 per share in cash, which implies: (i) a premium of 60.4 percent over the 60-day average closing price of Alibaba.com shares before the privatization announcement on Feb 21; (ii) a premium of 55.3 percent over the 10-day average closing price before the Feb 21 announcement; and (iii) a premium of 45.9% over the closing price of Alibaba.com shares on the last trading day before the Feb 21 announcement. Alibaba Group will not increase the offer price.
A major factor driving Alibaba Group’s decision to privatize its publicly traded subsidiary, which is engaged in the B2B marketplace business, is to provide minority shareholders with an opportunity to realize their investment in Alibaba.com at a significant premium over the current market price, while Alibaba.com implements a shift in its business strategy. Alibaba.com and Alibaba Group stated in their joint announcement on February 21, 2012, that this shift may adversely affect the Company’s revenue growth and limit earnings visibility for the foreseeable future. Alibaba.com shifted its focus in early 2011 from aggressive growth in paying members (i.e., sellers on the platform) to increasing the number and activity of buyers, who are essential to the success of the e-commerce platforms but do not pay any fees for the use of the platforms. This contributed towards Alibaba.com experiencing negative growth in its paying members and a decrease in revenue growth in 2011.
A scheme document jointly issued by Alibaba Group and Alibaba.com in relation to the proposed privatization of Alibaba.com has been uploaded to the Hong Kong Stock Exchange website. Persons are urged to read and consider carefully the scheme document as a whole, including the recommendations of the Independent Board Committee and the Independent Financial Advisor as set out therein.
“We consider the terms of the privatization proposal to be fair and reasonable. We advise the Independent Board Committee to recommend to independent shareholders that they vote in favor of the proposal,” said Somerley, the independent financial advisor.
“The Independent Board Committee, having considered the terms of the privatization proposal and having taken into account the opinion of Somerley, recommends the independent shareholders vote in favor of the resolution to approve the proposal,” said Walter Kwauk and Niu Gen Sheng, the two independent non-executive directors forming the Independent Board Committee.
The proposal offers minority shareholders HK$13.50 per share in cash, which implies: (i) a premium of 60.4 percent over the 60-day average closing price of Alibaba.com shares before the privatization announcement on Feb 21; (ii) a premium of 55.3 percent over the 10-day average closing price before the Feb 21 announcement; and (iii) a premium of 45.9% over the closing price of Alibaba.com shares on the last trading day before the Feb 21 announcement. Alibaba Group will not increase the offer price.
A major factor driving Alibaba Group’s decision to privatize its publicly traded subsidiary, which is engaged in the B2B marketplace business, is to provide minority shareholders with an opportunity to realize their investment in Alibaba.com at a significant premium over the current market price, while Alibaba.com implements a shift in its business strategy. Alibaba.com and Alibaba Group stated in their joint announcement on February 21, 2012, that this shift may adversely affect the Company’s revenue growth and limit earnings visibility for the foreseeable future. Alibaba.com shifted its focus in early 2011 from aggressive growth in paying members (i.e., sellers on the platform) to increasing the number and activity of buyers, who are essential to the success of the e-commerce platforms but do not pay any fees for the use of the platforms. This contributed towards Alibaba.com experiencing negative growth in its paying members and a decrease in revenue growth in 2011.
A scheme document jointly issued by Alibaba Group and Alibaba.com in relation to the proposed privatization of Alibaba.com has been uploaded to the Hong Kong Stock Exchange website. Persons are urged to read and consider carefully the scheme document as a whole, including the recommendations of the Independent Board Committee and the Independent Financial Advisor as set out therein.
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