Chinese e-commerce firm, Alibaba, is in late-stage talks with investors to buy back the 39% company stake owned by Yahoo!, reports the Wall Street Journal. Alibaba, which runs Yahoo! China, has hired Deutsche Bank and law firm Wachtell, Lipton, Rosen & Katz, for advice says people close to the matter. The move marks an effort by Alibaba to gain independence from Microsoft in the event of its successful Yahoo! takeover, and comes as a blow to Microsoft. Yahoo!’s strength in China and Japan is reportedly a key factor in its ongoing Yahoo! takeover effort.
Yahoo! bought its stake in Alibaba in Oct 2005. The agreement between the two firms gives Alibaba a “right of first offer”. In the case of a Microsoft offer this means the Yahoo! stake must first be offered to Alibaba shareholders before it is transferred to Microsoft. Alibaba is reportedly concerned that Microsoft’s management will destroy its image as a Chinese company.
Alibaba has a wide number of online and business interests, including Alibaba.com – a B2B business trading platform. Results announced this week showed that Alibaba.com’s net profit went up 340% to reach USD136.3 in the fiscal year ending Dec 31 2007.