GIC, Temasek buy combined US$1b in Alibaba stock in SoftBank sale

A GIC corporate logo seen at a staff conference in Singapore.
A GIC corporate logo seen at a staff conference in Singapore. PHOTO: BLOOMBERG

SINGAPORE (BLOOMBERG, REUTERS) - Singapore's state-owned investment firms Temasek Holdings and GIC, long-term investors in Alibaba Group Holding, bought a combined US$1 billion (S$1.38 billion) of stock in the Chinese e-commerce behemoth, the second-biggest stakes being sold by Japan's SoftBank Group.

The purchases add to the technology holdings of both investment firms. Temasek and GIC were early investors in Alibaba and hold major stakes in technology firms benefiting from the economic growth of the world's second-biggest economy. Japan's SoftBank is selling shares of China's biggest online retailer for the first time in 16 years.

"The purchase shows that GIC and Temasek are still confident about China's economy and the rise of e-commerce and technology in the country," Margaret Yang, a market analyst at CMC Markets in Singapore, said. "It's going to boost the national interest of Singapore in e-commerce in China and also in Southeast Asia."

The state-related investment firms will each pay US$500 million and US$74 per Alibaba share, according to a statement from Alibaba on Wednesday (June 1). That would result in 6.76 million new stock each. Temasek already owns 48.6 million American depositary receipts of Alibaba, according to data compiled by Bloomberg. GIC has been a long-time investor since before the Chinese firm's initial public offering in 2014, according to a person familiar with the transaction.

 

GIC owns 60 million shares worth US$482 million in Hong-Kong listed AAC Technologies Holdings Inc, a Chinese producer of miniaturized speakers and receivers for mobile phones, according to data compiled by Bloomberg. It also owns a stake in Cheetah Mobile Inc and ChinaCache International Holdings Ltd.

Temasek owns a stake worth US$98 million in Tencent Holdings Ltd, the Chinese WeChat messaging app developer. Both GIC and Temasek own stakes in Internet service provider 21Vianet Group Inc, with the Temasek stake valued at US$157 million and GIC's at US$21 million.

SoftBank, the largest investor in Alibaba, is selling US$8.9 billion of its stake in the Chinese e-commerce giant to cut its 11.9 trillion yen (S$150.2 billion) debt load. It said it would remain Alibaba's largest shareholder after the sale.

Shares of Alibaba fell about 6.5 per cent to close at US$76.69 in New York trading on Wednesday.