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Headline: Alibaba Plans To Spin Off Cainiao Via Separate Listing in Hong Kong
Alibaba Group said on Tuesday that it intends to spin off Cainiao by way of a separate listing of the logistics company’s shares on Hong Kong Stock Exchange’s Main Board.
The holding company submitted a spin-off proposal to the Hong Kong Stock Exchange, which confirmed that the company may proceed with the move. The aim is to spin off Cainiao via a global offering of Cainiao shares, comprising a Hong Kong public offering and an international offering.
Upon completion of the proposed spin-off, the company will continue to hold over 50% of Cainiao, retaining it as a subsidiary. Alibaba holds about 69.54% of Cainiao as of Tuesday.
Cainiao’s main businesses include international logistics, China logistics and technology, and other services.
Spin-Off Reasons
Alibaba’s board considers that a spin-off would benefit both Alibaba and Cainiao as investors would be better able to value Alibaba as well as better assess Cainiao on its own merits. Cainiao’s business would also appeal to a specialist investor base.
Alibaba said in a filing that the value of Cainiao is expected to be enhanced through the spin-off, which will in turn benefit Alibaba as Cainiao’s controlling shareholder, and its shareholders as a whole.
The size and structure of the global offering, Alibaba’s exact holding in Cainiao, have not yet been finalized. The spin-off is subject to, among other things, approval from the Listing Committee of the Hong Kong Stock Exchange for listing of, and permission to deal in, the Cainiao shares. The share sale is also awaiting the completion of the filing with the China Securities Regulatory Commission and the final decisions of Alibaba’s board and of Cainiao’s board of directors and shareholders.
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