Hangzhou, China (4E) – Alibaba Group Holding Ltd. said it is taking its initial public offering to the U.S. after discussions for a Hong Kong listing fell after management’s demanded to keep control in a share sale, according to sources familiar with the matter.
The sale, which analysts estimate the company’s value at over $70bn, would be the technology sector’s largest IPO since Facebook Inc. went public last year and would gauge investor appetite for China’s rapidly growing consumer market. The IPO would also be bigger compared to Twitter Inc.’s planned share sale.
The disagreements with the Hong Kong exchange came when Alibaba founder Jack Ma and his partners wanted to maintain control the company after listing by naming a majority of board members, which would result to two groups of shareholders. Hong Kong does not allow dual voting classes on newly listed companies.
The loss of the Alibaba IPO is a major setback to Hong Kong, which has not had an initial share sale of more than $4bn since October of 2010.
Alibaba’s U.S. IPO could likely come as early as the first quarter of 2014. This will potentially set up a battle between the NYSE and the Nasdaq for the right to host the high-profile listing. The Hangzhou-based company may hire underwriters before the year ends, according to one of the sources with knowledge of the matter.