Alibaba buys Cainiao stake for up to $3.75 billion, cancels IPO plans

March 26 (Reuters) - Opens in a new tab Alibaba Group (9988.HK) on Tuesday announced an acquisition of 36% of Cainiao shares. However, the company has not yet secured up to $3.75 billion and has abandoned plans for an initial public offering (IPO) for its logistics business in Hong Kong.

In the latest reversal of the Chinese e-commerce giant's restructuring plan, Alibaba, which owns about 64% of Tsaijiao, announced that it has offered to acquire the remaining stake.

Alibaba Group Chairman Tsai Tsai said, ``Given the strategic importance of Caiha to Alibaba and the significant long-term opportunity in building a global logistics network, now is the right time to invest again.'' I believe the time is right," Alibaba Group Chairman Tsai Tsai later said. In discussions with analysts, regulatory issues did not play a role in Cainiao's decision to cancel the IPO. Following the announcement, Alibaba's 4,444 U.S.-listed shares rose 0.7% in pre-market trading.

"The general environment for conducting capital market transactions to unlock value for shareholders simply does not exist in this part of the world," he said on Tuesday's conference call. ``For us, it doesn't make sense to participate in these capital market transactions.''

The company faced mismatched valuation expectations from potential investors, three people familiar with the matter said. .

Alibaba did not immediately respond to a request for comment on the valuation discrepancy, but Tsai said on Tuesday that his offer to minority shareholders valued Tsaijiao at $10.3 billion.

The goal is to complete the share buyback by June or July.

Alibaba has had a turbulent year since announcing the biggest reorganization in its 25-year history, splitting into six entities. The company brought in a new CEO and announced a public listing of its cloud division, but then abandoned it and refocused on its core business.

These core businesses, e-commerce and cloud, will be led by new group CEO Eddie Wu. Alibaba's domestic e-commerce platforms Tmall and Taobao remain the largest in China, but in recent years they have lost market share to competitors such as PDD Holdings (PDD.O), and the new tab Pinduoduo open.

Cainiao first filed its IPO documents with the Hong Kong Stock Exchange in September. Tuesday marked the last day of the six-month period in which the company must renew its listing status. The schedule has never been publicly announced.