HONG KONG (AP) — Chinese e-commerce giant Alibaba said it has no plans to sell shares in its third-party stake in fintech company Ant Group because it wants to retain its stake in an “important strategic partner.”
Alibaba Group Holdings said in a filing on Sunday that it would not participate in Ant’s share buyback program. It allows shareholders to resell up to 7.6% of their holdings at an unspecified price that values the company at 567.1 billion yuan ($78.8 billion).
Ant, which operates one of China’s leading mobile payment services, Alipay, saw its valuation plummet nearly 70% from around $280 billion ($38.9 billion) when it was planning an IPO in 2020. This was derailed by regulators who investigated the company and then fined it nearly $100 billion for breaking laws and regulations in the payments industry.
Given Ant’s plummeting valuation, investors who sell their shares to Ant are likely to get much less than they would have gotten in 2020.
“As Ant Group continues to be an important strategic partner for the various businesses of Alibaba Group, Alibaba Group has decided not to sell any shares to Ant Group under the proposed share buyback, in order to maintain its stake in Ant Group,” Alibaba said in the filing.
Alibaba had earlier said it may sell shares during the program. Singaporean public investment firm Temasek Holdings also said it was considering selling some of its shares.
Founded by Alibaba co-founder Jack Ma, Ant Group’s Alipay is the primary payment method on Alibaba’s Taobao and Tmall e-commerce platforms. It serves over a billion users.
Alibaba earlier this year divided its business into six business groups in an attempt to increase shareholder value. He plans to turn these businesses into corporations that could eventually go public and raise funds.
In May, Alibaba said its cloud unit, headed by former Alibaba CEO Daniel Zhang, was expected to go public within a year.