Alibaba seeks financing to buy back Yahoo! stake

The Chinese internet giant Alibaba Group (listed subsidiary Alibaba.com; 1688.HKG) plans to borrow US$3 billion to finance the repurchase of shares held by Yahoo! (YHOO.NASDAQ), The Wall Street Journal reported, citing people familiar with the situation. A consortium of six banks is offering a three-year term at around 4% and should be completed this month. Yahoo currently has a 40% stake in Alibaba, and is looking to raise capital and re-focus on its core business in the US. Yahoo is seeking to sell it stake in Alibaba as well as its investment in Yahoo Japan in an arrangement which would save the company US$4 billion in taxes. The company has been struggling amid competition from other giants such as Google (GOOG.NASDAQ) and Facebook, with revenue falling 21% in 2011. Alibaba operates China’s largest shopping websites, including Taobao Marketplace and Taobao Mall.