Alibaba considers joining Ant Group’s $6 billion share buyback program

Spread the love

Alibaba Group is considering selling back its Ant Group stake to a fintech firm. After nearly three years of regulatory crackdowns and a $10 billion slash to its once-more than $300 billion valuation, the company is proposing to launch a $6 billion share buyback program. are doing. steep 75%.

The e-commerce giant co-founded by billionaire Jack Ma said it had received a shareholder meeting approval notice from Ant Group, according to a filing with the Hong Kong stock exchange on Sunday. Alibaba, which owns a 33% stake in Ant, said the repurchased shares would go into the fintech firm’s employee incentive plans.

Ant spokesman said in a statement on Saturday that the personal limited partners of investment firms Hangzhou Junhan and Hangzhou Junzhi, including Ma himself, who is also a major shareholder in Ant, will participate in the share buyback. He voluntarily decided not to. According to a statement, they made the decision “out of commitment and confidence in the long-term development of Ant Group.”

Even with the regulatory crackdown over, Ant faces an uphill battle to regain its former glory. China’s central bank, the People’s Bank of China, said in a statement late Friday that it had been fined nearly $1 billion for violating various Chinese laws and regulations related to corporate governance, consumer protection and liquidation. bottom. The penalty comes after Ant’s massive $35 billion IPO — the world’s largest public offering and the company would have been valued at over $300 billion — came at the end of 2020 in a shocking decision following Ma’s remarks. and was announced almost three years after it was abruptly canceled. It has now become a notorious criticism of the country’s banking sector.

Since then, Ant has been forced to curb its once vast businesses, including consumer loans, digital payments, insurance and mutual funds. The company will also be required to become a financial holding company, and will be regulated like a bank rather than a fast-growing fintech company.

Ma, meanwhile, is expected to gradually hand over control of the company he co-founded more than 20 years ago. His net worth, which consists of ownership interests in both Alibaba and Ant, has almost halved to 24.3 billion as he implemented a crackdown on the entire internet sector over the past few years to curb the market influence of China’s largest company. became a dollar.

Forbes detailsAlibaba names billionaire Joseph Tsai as new chairman in surprise management overhaul

The $6 billion share buyback program will provide Ant investors with a “liquidity option,” according to an Ant spokesperson. The company has so far raised funding from domestic and foreign investors including the Canada Pension Plan Investment Commission, Temasek, private equity giants Carlyle Group and Warburg Pincus, but the company was recently delisted under Chinese rules. IPO revival is at least a few years away. A timeout period is required when a change of ownership occurs.

It is also “extremely difficult” for Ant to achieve its previous valuation due to heightened regulatory scrutiny, said the managing director of Beijing-based boutique investment bank Shanson & Co. says Shen Meng. about,” he says. “The company is now being treated like a financial company, so regulation will continue to be at a high level.”

#Alibaba #considers #joining #Ant #Groups #billion #share #buyback #program

Spread the love

Leave a Comment