Simpson Thacher & Bartlett will advise Alibaba Group Holdings Ltd. on a planned initial public offering in New York that could raise almost $13 billion.
The Chinese e-commerce giant recently ended talks with the Hong Kong Stock Exchange after being unable to agree on a share structure that would allow Alibaba’s senior management to maintain control of the company. Following a breakdown in the talks, the company is widely expected to list its shares in New York.
A company source confirmed that Simpson Thacher would have the lead role as issuer’s counsel in the company’s U.S. IPO. He said the company had yet to select underwriters for the listing.
The company source declined to name the Simpson Thacher lawyers working on the deal, but another source familiar with the matter said that Hong Kong partner Leiming Chen, Palo Alto partner Bill Hinmin, and Beijing partner Daniel Fertig will front the Simpson Thacher team. Hinmin advised the underwriters on the $16 billion IPO of Facebook Inc. last year.
The company source said Freshfields Bruckhaus & Deringer, where Alibaba general counsel Timothy Steinert was formerly a partner, may also play a role in the IPO but gave no further details. Freshfields had handled most of Alibaba’s previous Hong Kong capital markets work and would likely have had the lead role if the company had decided to proceed with an IPO there.
Alibaba’s decision to forgo a listing in Hong Kong has prompted much soul-searching. The Asian financial capital, which led the world in IPOs from 2009 to 2011, has seen a major slowdown over the past two years. A listing by Alibaba would have catapulted Hong Kong up the IPO charts again and might also have helped to attract other Chinese tech companies, a large number of which have also chosen to list in the U.S.
But the Hong Kong Stock Exchange ultimately decided that it could not bend the rules for Alibaba. The local economy’s historic domination by a handful of family-run conglomerates has made the issue of minority shareholder rights a major concern for Hong Kong policymakers and it was strongly feared that allowing Alibaba to have its way would open the floodgates to other companies seeking similar treatment.
U.S. listing rules are looser, but disclosure requirements are much more stringent and the threat of shareholder litigation also acts as a check on management.