ESE e-commerce giant Alibaba Group Holding Ltd will pursue an initial public offering (IPO) in the US after talks with Hong Kong regulators broke down, a move bound to set off a dogfight between the two main US stock boards for the offering.
The loss of the sale, which bankers have estimated to be worth more than $15bn (£9.3bn), is a blow to the Hong Kong stock exchange, as the deal would have added to its clout and its trading volumes.
The negotiations foundered after regulators decided they would not allow Alibaba’s partners to retain control over board nominations, maintaining that all shareholders should be treated equally, sources said.
A US listing for Alibaba would come at a time when the NYSE Euronext is seeking to snatch business away from the Nasdaq OMX Group, traditionally home to tech companies, after Facebook’s debut was marred by glitches on the exchange.
Social media network Twitter is leaning towards picking the New York Stock Exchange over Nasdaq for its highly anticipated initial public offering, a person familiar with the matter said yesterday.
The decision ends weeks of negotiations between Alibaba, the Hong Kong stock exchange and the city’s securities regulator over Alibaba’s shareholding structure.
“We’ve come to the end of dialogue with Hong Kong and we’re pivoting to the US to start the listing process,” said a company source familiar with the discussions.
Alibaba has engaged US law firms to start working on its flotation and will soon be hiring banks to manage the listing, added the company source, who was not authorised to speak publicly on the matter.
The choice of New York should make it easy for Alibaba founder Jack Ma and his management team to keep a tight grip on the company with a dual share structure used by Internet companies such as Google and Facebook.
Alibaba and the Hong Kong stock exchange declined to comment.