Alibaba Group Holding Ltd’s bid to privatize its HK –listed B2B sector

Alibaba Group Holding Ltd’s bid to privatize its Hong Kong-listed business-to-business arm.

Alibaba.com Ltd, could help the company readjust its operating strategy and add flexibility to ongoing negotiations with Yahoo Inc, according to analysts.

Privatizing Alibaba Group’s B2B sector is one of the steps for the company to build a more efficient and cooperative e-commerce platform.

Alibaba Group announced on Tuesday that it has made a bid to buy out minority shareholders in Alibaba.com Ltd.

The parent company offered HK$13.50 ($1.76) for each share to buy a stake of 27 percent.

Alibaba Group, based in Hangzhou, Zhejiang province, will need at least HK$18 billion to close the deal, said analysts.

The parent company is capable of raising adequate capital from banks and using its immense cash reserves, said Kelvin Ho, an analyst at Yuanta Securities Co Ltd. Ho added that, at the end of 2011, the company’s net cash totaled more than 10 billion yuan ($1.5 billion).

Alibaba Group also signed a $3 billion loan agreement with six banks on Tuesday.

The group is likely to seek more lenders to underwrite the loan.

After the buyout, Alibaba Group will enjoy more flexibility to restructure its business.
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