Global law firm White & Case LLP has advised the eight banks underwriting a US$1 billion bank facility to Alibaba Group Holding, China’s biggest e-commerce company, as part of a US$5.7 billion financing package to fund the repurchase of half of Yahoo’s 40% stake in the company. The banks include Australia and New Zealand Banking Group Limited, Barclays Bank PLC, Citigroup Global Markets Asia Limited, Credit Suisse AG, Singapore Branch, DBS Bank Ltd., Deutsche Bank AG, Singapore Branch, Mizuho Corporate Bank, Ltd. and Morgan Stanley Asia Limited.
Alibaba Group Holding completed the US$7.1 billion repurchase of half of Yahoo’s 40% stake on September 18, 2012. This represents the largest private financing for a private sector Chinese company and the largest non-LBO private financing for a technology company globally, to date.
The acquisition is a follow-on to an agreement signed in May which set out the terms and framework for Alibaba to pay Yahoo $6.3 billion in cash and US$800 million in preference shares for its stake which equated to a total acquisition cost of US$7.1 billion. The difference between the US$5.9 billion and the total amount is to be covered by Alibaba internal cash resources. The agreement signed in May also provided Alibaba the right to buy back half of Yahoo’s remaining stake, another 10% of its outstanding share capital, at the time of a potential future IPO.
“In these challenging market conditions, it has been a real boost to the team to be able to see this transaction to a close,” commented John Hartley, head of White & Case’s Asia banking and finance group. “There were many hurdles to overcome with this one, not least of which was the optionality which needed to be built into the financing structure”.
John Hartley led the White & Case team with support from local partner, Eugene Man and a large number of Hong Kong associates including Karen Mak and June Chun. Partner John Shum, supported by local partner Jamie Thomas, led a separate team which advised HSBC as intercreditor agent on the financing.
Other law firms involved in the deal were King & Wood as PRC counsel and Walkers as offshore counsel to the banks. Acting for Alibaba: Freshfields as international counsel, Fangda Partners as PRC counsel and Maples and Calder as offshore counsel.
This follows our role advising the banks underwriting the US$3 billion financing in support of the take private of Alibaba.com Ltd in May.
