E-Commerce Giant Buys Controlling Stake in Citic Group
Alibaba the e-commerce giant joined the recent wave of corporate investments in little known firms, which provided the much needed boost in the lackluster in Hong Kong’s stock market just before the lunar New Year break. Alibaba and private equity firm Yunfeng which is co-founded by Alibaba chairman Jack Ma stated that they have agreed in purchasing controlling stakes in Citic 21CN a loss making drug data firm.
The company will be getting around 4.4 billion new shares in Citic 21CN which is a 54 percent stake after paying HK$ 1.33 billion. The company’s acquisition of the loosely trade company falls short after its rival Tencent invested HK$1.5 billion in China South City. Due to persistent weakness in the global stock market, several investors fret on the growth momentum in the mainland along with the United States shaky recovery, investors are now switching focus to small capital stock that was special investment stories.
This month Henry Cheng’s International Entertainment Corp. that attracted attention of investors after they said that it was in talks in buying 70 percent stake of Suncity International, a leading junket operator in Macau for around HK$ 7.35 billion. And in the last six months shares in the International Entertainment Corp have increase by fivefold.
By purchasing the unprofitable data firm, Alibaba’s acquisition which is partly owned by mainland Citic Group had some market watchers that are suggesting that Alibaba might be planning a reverse takeover or a backdoor listing.