The most valuable Chinese e-commerce company, Alibaba Group Holding, will hold a highly anticipated U.S. initial public offering after it failed to agree with the stock exchange in Hong Kong over having a listing there, according to insiders familiar with the company.
The deal is estimated to value the business at more than $70 billion based on estimates by analysts and would make it the biggest in the tech sector since last year’s Facebook IPO. It would also test the global investor’s appetite for China’s consumer market that is quickly growing.
The offering made by Alibaba, which could be as early as the first quarter of 2014, sets up a possible battle between the Nasdaq and the New York Stock Exchange for a listing that is so high profile.
Losing the IPO of Alibaba is a huge blow for the stock exchange in Hong Kong, which has had problems the past two years to regain the status it had in 2011 of being the top venue in the world for new IPO listings.
Hong Kong investment bankers were pitching for a role in the Alibaba IPO, which would have been the city’s biggest in recent years.
Alibaba operates a marketplace online such as Tmall and Taobao, but has not yet filed for its U.S. listing. However, the company hires a law firm in the U.S. to work in New York on its IPO. It is likely to hire a bank soon, said one of the insiders.
If Alibaba is to list in the United States, it will use the same structure for its partnership in nominating board members.
The company faces a more litigious environment in the U.S. compared to in Hong Kong, where it is extremely rare to experience class action.
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