Alibaba Opts for New York over Hong Kong in Launching IPO

Chinese electronic commerce (e-commerce) giant Alibaba Group said that its keenly-anticipated initial public offering (IPO) will be held on the New York Stock Exchange (NYSE), thus ending speculation that it might revert to its original choice of Hong Kong.

Alibaba confirmed that it was beginning the IPO process in the US. The public offering is the most high-profile since that of Facebook nearly two years ago,

Reports suggest that the group is in talks with six banks on possible lead underwriting roles: Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan and Morgan Stanley.

Hangzhou, China-based Alibaba has an estimated value upwards of US$140bn and IPO proceeds are likely to exceed US$15bn, which would yield around US$260m in underwriting fees for the banks selected.

Unconfirmed reports suggest that the IPO is likely to take place in the third quarter of 2014 and documents could be filed as soon as next month. Yahoo, which currently has a 24% holding in Alibaba, has indicted that it plans to use the IPO to reduce its stake. The group ‘s other major shareholder is Japan’s SoftBank Corp, which has a 37% holding.

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