Alibaba Group Holding Ltd. is preparing to file for an initial public offering in the U.S. as soon as April, according to people with knowledge of the matter.
China's largest e-commerce company is working with New York-based law firm Simpson Thacher & Bartlett as it gets ready to sell shares, said two of the people, who asked not to be identified as the process is private. The filing may even come this month, one said. Shares of Yahoo Inc., which owns a 24% stake in Alibaba, rose on the news.
Alibaba is opting for a U.S. listing as it struggles to persuade Hong Kong regulators to approve a proposed governance structure, the people said. Even after filing for a U.S. offering, Alibaba could still decide to list in Hong Kong should regulators there approve its plan to give executives control over board nominations, one of the people said.
Alibaba may not outline its fundraising target from the IPO — a step typically taken just before a company begins to formally market its IPO to investors — for several months after the initial filing, one of the people said. The sale has the potential to be the largest first-time share offering since Facebook raised $16 billion in May 2013.
Alibaba's expansion since former English teacher Jack Ma started the company in his Hangzhou apartment in 1999 with two dozen items for sale mirrors China's emergence as an economic superpower. The success has made Ma, 49, one of China's richest people, with an estimated net worth of $11.4 billion, according to the Bloomberg Billionaires Index.
The IPO would allow Sunnyvale, Calif.-based Yahoo to begin selling its stake — which could be worth $37 billion at the average of analysts' estimates of Alibaba's value. Yahoo shares closed up 37 cents, or 1%, at $37.60 on Friday.