According to marketWatch reports, Yahoo Inc. will subscribe to US$100 million worth of shares in Alibaba.com Corp.'s initial public offering ahead of a Hong Kong listing.
Earlier, it was known that Yahoo would subscribe to 10% of the online business-to-business firm's IPO, which was slated to raise up to US$1 billion. Latest report confirms the previous statements. California-based Yahoo already owns 39% of Alibaba Group, the parent of Alibaba.com, but it has no direct holding in the business-to-business unit.
The Term Sheet report says that Alibaba group will sell 858.9 million shares or 17% of Alibaba.com's enlarged share capital in the IPO. The global share offering will start from 15th October and the listing on the Hong Kong bourse is expected on 6th November.
Reports also say that only 26.5% of the shares on offer will be the new stock, that yet has not been traded privately before the offering. It means that the bulk of the raised funds will not be directed into expanding Alibaba.com.
Reports also say that Alibaba.com already runs the risk of helping out its affiliations at the expense of shareholder value, as all affiliations are running in losses presently. On Tuesday, the person familiar with the deal spoke to Dow Jones Newswires, "The company doesn't need a billion dollars for its business expansion and future mergers and acquisitions. But having a big IPO is a landmark event for the company and will create larger liquidity in the market."