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Last updated: December 29, 2011 7:26 pm
Alibaba Group has hired Duberstein Group, the Washington lobbying company, in the latest sign that the Chinese internet group is considering a bid for the whole of Yahoo, if talks to buy back the US rival’s Asian assets fall through.
Japan’s Softbank, which has a 30 per cent stake in Alibaba and jointly owns Yahoo Japan, is also named in a US congressional filing made by Duberstein earlier this month.
Alibaba and Softbank, Yahoo’s partners in Asia, offered in October to buy back the US company’s 40 per cent in Alibaba and 35 per cent in Yahoo Japan. The troubled internet company’s investments in Alibaba and Yahoo Japan are considered to be by far its most valuable assets, accounting for the bulk of the company’s $20bn valuation.
Recent discussions have centred on Yahoo retaining 15 per cent of Alibaba to keep a stake in any future gains in China, while selling its remaining holdings.
However, Jack Ma, Alibaba’s founder, has repeatedly made it clear that he is interested in buying the whole of the US company. Under a 2005 agreement with Yahoo, he has a right of first refusal on any Yahoo acquisition.
Hiring a US lobbying firm could help Alibaba soften any potential political opposition to a Chinese company buying a US internet asset. Chinese technology companies, such as Huawei, the telecoms equipment maker, have had attempts to buy US companies blocked in the past.
US officials are likely to be concerned by the fact that Chinese internet companies co-operate with China’s strict online censorship regime. Google moved its internet search operations out of China in 2010 following disagreements over censorship.
The Duberstein Group is headed by Kenneth Duberstein, who was White House chief of staff under Ronald Reagan. The company also acts for Goldman Sachs, BP America and PepsiCo.
This is the first time that Alibaba has registered to lobby the US government. Under US law, lobbying firms are required to make public disclosure within 45 days of certain events, such as making contact with public officials. The registration is effective from December 1, but lobbying work is likely to have begun earlier in the autumn.
Wachtell, Lipton, Rosen and Katz, a New York-based law firm that specialises in mergers and acquisitions, was listed as an intermediary for Alibaba. It has been involved in deals for clients such as AT&T, Kraft and JPMorgan Chase.
Alibaba declined to comment. Duberstein could not be immediately reached for comment.
Shares in Alibaba, which have lost more than 40 per cent of their value over the past year, were largely unchanged at HK$8.03 on the Hong Kong stock exchange. Yahoo shares rose 1.7 per cent to $16.05 in early trading on Nasdaq.
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