Alibaba scraps Cainiao IPO, to buy back US$3.7b shares

Alibaba (9988) is calling off an initial public offering for its Cainiao logistics arm, shelving a much-anticipated debut that could have raised more than US$1 billion (HK$7.8 billion).

It also announced plans to repurchase up to US$3.75 billion shares of Cainiao from its minority shareholders for US$0.62 per share.

Cainiao shareholders may choose to accept the offer or continue to own shares.

The withdrawal and the offer aim to "better realize strategic synergies" with its e-commerce business, according to a filing.

But Bloomberg reported China's e-commerce pioneer decided to postpone the transaction because of poor market conditions, people familiar with the matter said.

It lost its taste for the deal this year as stocks waned, said sources, but Alibaba could choose to revive the IPO should markets recover.

It is the second time Alibaba has nixed a high-profile coming-out party for one of its main businesses. In 2023, the Chinese internet firm stunned the market when it called off a listing of its US$11 billion cloud unit.

Cainiao, which handles a major chunk of the millions of parcels that Alibaba's e-commerce business generates daily, was considered one of Alibaba's fastest-growing enterprises.

This came as Hong Kong stocks rose 255 points at one point, driven by tech giants, including Tencent (0700), which at one point climbed 4 percent to above the HK$300 level.

The Hang Seng Index rose 0.88 percent to 16,618 yesterday, supported by tech shares and bank shares. The main board turnovers amounted to HK$108.7 billion.

The Hang Seng Tech Index jumped 1 percent to 3,471, with Tencent leading the sector and climbing 3.74 percent to HK$299.4. Baidu (9888) and Xiaomi (1810) advanced 3.67 percent and 3.24 percent, respectively.

Tencent's game Honor of Kings became the global mobile game bestseller yesterday, according to Sensor Tower, and it continued repurchasing its shares for two consecutive trading days.

China Merchants Bank (3968) jumped 4.33 percent yesterday following its beating-estimate dividend payout, marking the best-performing blue chip.

And Central European casino and hotel operator Palasino (2536) rose as much as 27.7 percent in its trading debut yesterday. It ended with HK$3 per share, 15.4 percent higher than its offer price of HK$2.6, with a turnover of HK$150 million.

It raised net proceeds of HK$194 million. The public offering was oversubscribed by 14.96 times.

Meanwhile, Horizon Robotics, a Chinese provider of autonomous driving computing solutions, applied to its Hong Kong IPO yesterday.

Earlier media reports show that the firm may raise about US$500 million.