Alibaba explores selling 30% stake in Weibo to Chinese state firm

BEIJING • Alibaba Group Holding is in talks with a state-owned conglomerate about a potential deal involving its stake in Weibo, as Beijing moves to curb the influence of China's tech giants in the sensitive media sphere.

China's e-commerce leader is exploring options for its roughly 30 per cent slice of the Twitter-like social media service, according to people familiar with the matter. The discussions between the technology giant and Shanghai Media Group (SMG) could lead to the latter purchasing all of Alibaba's stake in Weibo, the people said.

Regulators are taking a closer look at the enormous reach that tech companies like Alibaba enjoy in online media, part of a broader campaign to curtail the growing power of its largest corporations.

Alibaba and its affiliates have, over the years, built a sprawling portfolio of media assets that include newspapers, television production companies, social media and advertising assets. Concerned about the company's influence on public opinion, the government wants Alibaba to offload some of those holdings, Bloomberg News reported in March.

Alibaba's shares slid as much as 2.3 per cent on Wednesday to the lowest since Dec 3, while Weibo dropped 1.5 per cent. The Nasdaq Golden Dragon China Index slumped 2.4 per cent.

SMG, one of China's largest state-owned media and cultural conglomerates, would stand a higher chance of gaining Beijing's approval than a private acquirer.

Weibo is among the most influential - and controversial - of Alibaba's media holdings. The social media site scrubbed posts and took down comments relating to a scandal involving an Alibaba partner last year, fuelling concern among officials about how censorship could be employed by private enterprises or individuals.

Weibo and its controlling shareholder Sina Corp raised US$385 million (S$521 million) from a second listing in Hong Kong this month. The offering came in the midst of Chinese regulators' tightening of oversight on local firms traded overseas.

Weibo is listed on Nasdaq and has a market value of US$7.2 billion. Its shares, which started trading in Hong Kong on Dec 8, have dived about 16 per cent from their offer price of HK$272.80 after regulators fined the website over the site's content.

BLOOMBERG