Alibaba Group said on Tuesday it was offering to buy the 36% of Cainiao it does not already own for up to $3.75 billion, abandoning plans for an initial public offering (IPO) of the logistics business in Hong Kong.
In the Chinese e-commerce giant's latest u-turn of its
restructuring plan, Alibaba, which holds a stake of around 64% in Cainiao, said
it was offering to acquire the remaining stock.
"Given the strategic importance of Cainiao to Alibaba
and the significant long-term opportunity we see in building out a global
logistics network, we believe this is an appropriate time to double down,"
said Alibaba Group Chairman Joe Tsai.
Tsai in a recent earnings call said all Alibaba's planned
IPOs, including Cainiao's "were subject to market conditions".
"Market conditions currently are just not in a state
where we believe we can really truly reflect the true intrinsic value of these
businesses," he said at the time.
In a statement, Alibaba said on Tuesday that it is offering
minority shareholders of Cainiao an opportunity to sell all the outstanding
shares for $0.62 per share.
Alibaba has had a tumultuous year since announcing the
biggest shake-up in its 25-year history by splitting into six units. It has
installed a new CEO, announced and then abandoned listing its Cloud division
and refocused on its core businesses.
"The management reorganization resulted in more nimble
and efficient decision-making, and we have seen a major positive impact on our
business. We are confident that the effects of this reorganization will be
reflected in Alibaba's operating and financial metrics in the future,"
Tsai said.
Cainiao first filed the IPO paperwork to the Hong Kong Stock
Exchange in September. Tuesday marked the last day of a six month window before
which it was required to update its listing status. No timeline had ever been
publicly disclosed.
Alibaba also said it would hold a conference call at 9:30
p.m. Hong Kong time to discuss the Cainiao announcement.
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