Alibaba, Yunfeng sign $1.22bn China deal(2)

Alibaba has teamed with Jack Ma’s PE firm to acquire a minority interest in NYSE-listed Youku Tudou.

China’s e-commerce giant The Alibaba Group and private equity firm Yunfeng Capital, both owned by Chinese internet tycoon Jack Ma, have jointly invested in Chinese internet television company Youku Tudou, according to a statement.

The pair will inject $1.22 billion into the business, which is listed on the New York Stock Exchange, taking over 707 million newly issued shares and 13.8 million existing Class A ordinary shares in the business at a price of about $1.69 per share or $30.50 per American depositary share.

Alibaba and Yunfeng will own 16.5 percent and 2 percent of the company respectively after the transaction, which is subject to the satisfaction of customary closing conditions.

“We are excited to cooperate and work closely with Victor and his team to support their innovation in this key emerging space as well as accelerate our digital entertainment and video content strategy,” Ma, who serves as executive chairman of Alibaba, said in a statement.

“This is an important strategic initiative that will further extend the Alibaba ecosystem and bring new products and services to Alibaba's customers.”

Youku Tudou joins the Alibaba family as the business gears up to a US listing that could be worth up to $15 billion, analysts have estimated.

Yunfeng, the private equity fund founded by Ma and Target Media founder David Yu, is also an investor in Alibaba, and was recently the subject of a rare secondary sale in China, where Chinese online gaming firm Giant Interactive sold its LP interests in two of Yunfeng Capital’s E-Commerce Funds.

The interests in the vehicles were sold in February and collectively held all of Giant Interactive’s Alibaba shares, an earlier filing said.